The international credit rating agency Fitch on Thursday lowered its ratings outlook for Serbia from stable to negative, citing the country's deteriorating fiscal and external financing position and weak economic growth outlook.
Fitch Ratings affirmed Serbia's long-term foreign- and local-currency issuer default rating of "BB-" level, which is three steps into junk territory.
Fitch said the new coalition government has amended the central bank law in a manner that has "dented investor confidence" and may complicate the agreement of a new International Monetary Fund deal, according to the Serbian Tanjug news agency.
"Instead of focusing on the correction of the growing fiscal deficit and public debt, the new government amended the law on the central bank in a way that jeopardised the investors' trust, which can cause complications concerning the agreement on the new loan from the International Monetary Fund (IMF)," the rater was quoted as saying in its press release.
Earlier this month, Standard & Poor's Ratings Services downgraded its foreign-currency rating on Serbia to double-B-minus, citing the government's failure to quickly adopt policies that would promote confidence in its monetary regime and restore post-election fiscal stability.
