US financial service company Standard & Poor’s has decided to change its credit rating for the Icelandic state treasury from stable to negative because of Iceland’s current imbalanced economy.
According to a statement from Standard & Poor’s, its reevaluation of Iceland’s credit rating reflects the growing and chronic imbalance of the Icelandic economy in addition to the lack of restraint in relation to state finance, ruv.is reports.
Despite a recent increase in short-term interest rates, the rapid increase of loans in foreign currencies has not slowed and there has not been much influence on the interest rates of mortgages, the statement says.
Iceland’s Prime Minister Geir H. Haarde claimed Standard & Poor’s financial forecast is built on a weak basis.
Click here to read more about the current situation of the Icelandic economy.
