S&P lifts Latvia from junk

Standard & Poor's said it raised the long- and short-term local- and foreign-currency sovereign credit ratings on the Republic of Latvia to BBB-/A-3 from BB+/B.

The agency said it withdrew the recovery rating of 3 because under its criteria, the agency does not assign recovery ratings to investment-grade sovereign debt.

The agency also said it revised Latvia's transfer and convertibility assessment to A- from BBB+.

The outlook is stable.

The ratings balance a view of the government's proven political commitment to fiscal discipline, the economy's considerable flexibility and the material increase in exports as a share of GDP, S&P said, against the constraints of large external debt, relatively moderate GDP per capita and a lack of monetary policy flexibility.

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