Moody's threat to cut Portuguese ratings raises loans interest to 6.7 percent

Moody's threat to revise Portuguese sovereign ratings and lower it up to two levels is having a strong impact on the Portuguese secondary debt market Tuesday.

The 10-year debt interest went up to 6.726 percent Tuesday compared to 6.694 percent on Monday.

Ratings agency Moody's said it may cut Portugal's rating by one or two notches within three months. The agency made the announcement only five days after downgrading the Spanish debt.

Portugal will have to refinance the country' s debts by 27 billion Euros in 2011 and the change of rating would put a heavier burden on the Portuguese finances, analysts said. The refinancing program will start in March.

It takes around three months for the agency to analyse the country' s financial situation in order to decide on the rate change.

Although the country is passing through a budget crisis, Portuguese exports are having a very good performance, up 15 percent compared to that of 2009.

Source: Xinhua