Fitch ratings has upgraded Estonia’s long-term foreign and local currency issuer default ratings to A from BBB+ and A- respectively, and removed them from rating watch positive. A stable outlook is assigned.
Fitch says joining the euro area improves Estonia’s risk profile as it reduces risks associated with the country’s sizeable external debt and fx lending in the domestic banking system, and gives its banks access to ECB liquidity facilities.
Fitch feels Estonia’s sound public finances and flexible economy make the country well-suited for currency union.
