Fitch downgrades Catalonia to BB; outlook negative

FXStreet (Córdoba) - Fitch Ratings downgraded the Autonomous Community of Catalonia (Catalonia) to 'BB' from 'BBB-' , while keeping a negative outlook.

Among main drivers, Fitch cited Catalonia passing a resolution on 9 November for formally commencing the process for independence.

According to Fitch, Catalonia's 'BB' and Negative Outlook also reflect the following main factors:

The region posted wide negative current balances over 2008-2014 (averaging -16%), and will need funding to finance its expected budget deficit in 2015, which Fitch expects to be around 2% of regional GDP, and over medium term.

Catalonia's liquidity is fragile and there is uncertainty as to whether the region will continue to receive liquidity support from the central government under the same terms.

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