The Importance of Sovereign Rating for Romania in the Crisis Context
The sovereign credit risk rating for Romania had significant changes in the 1996 – 2008 periods, from category B- with negative perspective, as the lowest level, to BBB-, with positive perspective. The objective of this paper is to explain the importance of sovereign rating for Romania in the crisis context. The first part of the article is a short presentation of the sovereign rating literature regarding the concept and the risk sources. The second part highlights the relation between foreign currency long-term sovereign rating, foreign direct investment and debt cost. The paper find evidence that sovereign rating influences capital inflows and debt cost.
Volume (Year): XI (2011)
Issue (Month): 1 (May)
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