Moody's has raised Romania's sovereign rating to it's lowest investment grade cate-gory (Baa3) with a stable outlook, citing con-tinuing institutional reform, a reduction in public debt ratios and EU entry in January 2007.

External liquidity risk, however, has risen substantially since mid-2005?reflected in a sharply deteriorating current account deficit (probably around 10% of GDP in 2006), rapid credit growth and strong real exchange rate appreciation?and remains a serious concern in the ST, particularly as global economic uncertainty leaves emerging market investors more cautious.

To read more from Euler Hermes' weekly Country Risk Bulletin, visit www.eulerhermes.com/usa/en/news_publications/country_risk_bulletin.html.