Fitch warns of possible Romania's rating downgrade

NEW YORK Oct 1 (Reuters) - Fitch Ratings said on Thursday that Romania's credit ratings could come under increased downgrade pressure if the collapse of the country's coalition government brings significant deterioration to its economic policies.

Romania's Social Democrats quit the coalition government on Thursday before a November presidential election, raising the risk of failing to meet obligations that are part of its agreement with the International Monetary Fund for a 20 billion euro aid package.

"Failure of the IMF program would intensify downwards pressure on the ratings," Fitch analyst Andrew Colquhoun said in a statement.

Romania's coalition went sour this week when Prime Minister Emil Boc suddenly sacked Interior Minister Dan Nica -- a Social Democrat -- and proposed a replacement from his own party.

Boc promised to maintain Romania's reform agenda and to respect commitments with the IMF, which includes reining in the budget deficit, but Fitch warned against potential "deficit-boosting populist gestures" before elections.

"Further political uncertainty could also dent investor and depositor confidence in Romania and its financial system," the ratings agency said in the statement.

It added that a sustained weakening of the national currency would hurt Romania's exports, complicating the country's economic adjustment.

Fitch currently rates Romania's long-term foreign-currency debt at BB-plus and its long-term local-currency debt BBB-minus, both with negative outlooks.

(Reporting by Walter Brandimarte; Editing by Jeffrey Benkoe)