Fitch Ratings recently affirmed the Republic of Serbia’s Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘BB-’. The outlook is negative. Simultaneously the agency affirmed the Short-term foreign currency IDR at ‘B’ and the Country Ceiling at ‘BB-’, reads a press release. David Heslam, Director in Fitch’s Sovereign team said, The stabilisation of external economic and financial conditions and a three billion Euro IMF programme have helped buttress confidence in Serbia following a period of severe stress in fourth quarter of 2008. However, the extent of the recession, sizeable external financing requirements, currency-linked credit risks in the heavily euroised banking sector, deteriorating public finances and uncertainty over the government’s ability to consistently tighten fiscal policy to remain on track with its IMF programme mean that risks remain on the downside, said Heslam. Serbia’s substantial current account deficit (CAD) of 17.4 % of GDP in 2008 left it susceptible to the global financial crisis. The reduced availability of private external capital flows to fund a deficit on this scale triggered a sharp economic adjustment.