Moody's maintains Portugal at A3, outlook negative

By @ibtimes on

Moody's credit rating for Portugal depends heavily on the country maintaining strong commitment to consolidating its finances, the rating agency said on Friday.

Moody's maintains Portugal at A3, toward the lower end of its investment grade ratings, with a negative outlook after Prime Minister Jose Socrates lost a vote on fresh austerity measures to tackle the country's debt crisis and resigned on Wednesday.

Strong commitment to fiscal consolidation by both leading political parties is an important reason why the rating remains within the A range, Moody's said in a statement.

Rating agency Fitch downgraded Portugal to A- on Thursday, on a par with the Moody's rating and four notches into investment grade. However, Standard and Poor's cut Portugal on Friday to BBB, two notches below the others, and warned of further cuts.

Portuguese borrowing costs on 10-year debt rose above 8 percent for the first time since the launch of the euro currency in reaction to the downgrades.

(Reporting by William James; Editing by Ruth Pitchford)

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