Standard & Poor’s affirmed the credit rating of BH 9/13/2017 Tweet September 13, 2017 International Rating Agency Standard and Poor's affirmed the credit rating to Bosnia and Herzegovina, being B with Stable Outlook. The rating is based on the fact that the fiscal deficit is sustainable, in spite of delay in continuation of the Extended Fund Facility (EFF), which was approved last year by the International Monetary Fund (IMF), and it is also based on the fact that the country's economy has a moderate growth, which has a positive effect on fiscal revenues, according to the explanation of Standard and Poor's analysts. Stable outlook reflects the opinions of this Agency analysts that the government will be able to cover the financing of budgetary needs at the domestic capital market and that it will be focused on fulfilment of the conditions of the Extended Fund Program (EFF Arrangement) with the IMF in the next 12 months. External debt is rated as relatively low and as favorable lending terms. The BH credit rating could be reduced if the planned IMF tranche is not reimbursed in the forthcoming period, so there would be a need for financing from the outside and we would have the pressure of illiquidity at the level of both Entities over the next 12 months. Increasing of BH credit rating could happen if the authorities move forward with structural reforms that would help increasing of the country's growth potential and raise the level of revenues. Improving of the political relations within BH could also help to increase BH credit rating, according to Standard and Poor's analysts in the report. Standard and Poor's has found that BH is commited to maintaining the independence of the Central Bank of Bosnia and Herzegovina and preserving the stability of the monetary policy based on the currency board, which includes the full coverage of the monetary base by the central bank's foreign currency reserves.
