Is Moody’s may lower the rating of Polish? – Polish Radio

Worse rating or reduced creditworthiness means among other things that the company and the Treasury will pay a higher interest rate on loans. And it’s also less investment.

 

The reduced rating of the cost

 

In January, the US rating agency Standard & amp; Poor’s downgraded the creditworthiness of Polish one step: from “A-” to “BBB +” with a negative outlook. And today (4.04). Moody’s said that our constitutional crisis increases the risk of political and spoils the atmosphere. There is nothing to worry about?

 

– In the world there are three major rating agencies: Standard and Poor’s, Moody’s and Fitch. One of them, S & amp; P already downgraded, which is an assessment of the creditworthiness of Polish, the other two agencies have not decreased, but suggest that such a reduction can take place. This is another message from Moody’s, which suggests that the events in Poland, increase credit risk. Agency will emit its new assessment in May and is a high risk that the rating of Polish, or credit rating will be reduced – explains the guest Ones Ignacy Morawski, economist.

 

Direct and indirect effects worse ratings

 

The lower the credit rating means in such a direct way, the higher cost of debt, or have to pay more as interest. Of course, it need not be the effect visible to the naked eye, because it can simultaneously operate factors that lower interest, but the effect of a reduction in the rating is negative borrowing costs.

 

– But there are also indirect effects. It is generally negative signal going to all investors, not just those who lend to the government, but also those who want to invest capital here, that something was going wrong – emphasizes Ignacy Morawski.

 

Criteria for the ratings

 

However, our economy is doing well. So why such forecasts and assessment?

 

– There are several factors that are taken into account. First of all, these are the economic factors associated with the macro-stability. Such as public debt, mainly in relation to the foreign debt in foreign currencies, the sustainability of economic growth, inflation. But there are also soft factors, such as political stability, the stability of the legal system, that is, those that are hard to describe some indicators – draws attention to guest Ones.

 

This can be compared to the situation in the bank. If we go to the bank to take out a loan, the bank our estimates, checks all the information, eg. For jobs, earnings, about where he lives client, where it comes from, marital status, family, children, because everything describes the “condition of the borrower “.

 

– I also do agencies. Although in our case the economic aspects were not so important – notes Ignacy Morawski.

 

The Constitutional Court a rating

 

According to the guest Ones rather it decided the case with the Constitutional Court. Because if someone would invest large sums in the country, and suddenly there comes to strong shocks legal, maybe not immediately flee in panic, but the credibility of this country will be revised.

 

– However, economic factors also arouse concern of rating agencies. Because, even though the economy is developing very well, and there is nothing that would suggest a risk of serious crisis, but increasing our national debt. And in good times the public debt should not grow. And it raises doubts rating agencies – says Ignacy Morawski.

 

And what is the effect of the January downgrade Polish? After all, gold has returned to the level at the end of last year, our 10-year bonds in May decent profitability, which is to say that you can not see the negative effects.

 

– Because such effects may not be visible to the naked eye. Because the zloty exchange rate and the cost of borrowing money affects about 10 factors, including rating if economic growth. If you change this one factor, or rating, which has a negative impact on the currency, the price of bonds and other assets – but at the same time you can change many factors that interact positively. And that is why the effect of the lower rating is not visible, but it is negative – comments guest Ones.

 

And he adds that this should not be exaggerated, because there is nothing like that, what would cause that eg. To draw money from the bank and keep in a sock. It’s not about that. These are often processes that may accumulate in the negative phenomena, even after many years.

 

International rating agencies?

 

And you may need to invoke your own credit rating agencies, for example. Russia has its own agency, China also have such an agency.

 

– But there are doubts for these agencies, which operate as they were big slip in terms of credibility. How even before the last great crisis, when positively assessed the bonds, which later were insolvent. Not all of them so trust, and if establish new agencies, their credibility would be extremely low. Since gaining credibility for years, for decades. If anyone would like to establish such an agency itself, it would have for decades to try to have someone to trust him – predicts guest Ones Ignacy Morawski, economist.

 

That’s why you need to, however, reckon with the opinions of those already operating agencies, as they affect our economy, it at what price borrow money. They affect the perception among Polish financial investors.

 

Robert Lidke, mb