It has been announced over night that credit ratings agency Fitch have downgraded Spain by 3 notches to BBB due to the fact they believe Spain’s ability to pay its debts are weakening and that the chances of a Spanish bailout are increasing. This is further bad news for a country with spiralling unemployment and a banking system under significant pressure and also ramps up the pressure on the Spanish government who recently publicly stated they believe their country does not need a bailout.
On Wednesday Spain managed to raise €2.1 billion in a bond sale however this is far from what the country needs (figures rumoured to be around the €60 billion mark seems to be what the Spanish banking sector alone needs to prevent meltdown).
On Monday we are due a report from the International Monetary Fund (IMF) on the Spanish economy which is expected to show the amount they believe the country needs to raise in order to avoid defaulting on its debt and help start a recovery. It seems the Spanish government are awaiting this report before they decide on how best to recapitalise its banks. Following all this news Germany Chancellor Angela Merkel said the rest of Europe is waiting to help.
This news story is looking like it will run and run and so if you need to transfer money internationally ensure you speak to one of our experienced currency brokers today so they can discuss all the options available to you so you can work towards getting the best possible exchange rates.