DUBLIN Ireland could face a credit downgrade unless it convinces markets it has a grip on the final cost of dealing with nationalized Anglo Irish Bank, Fitch Ratings said on Tuesday.
"I cannot pretend that the current rating is totally secure but that does not mean that negative action is imminent or inevitable," Fitch senior analyst Chris Pryce told Reuters in a telephone interview.
Earlier on Tuesday, another agency Standard & Poor's warned it may cut Ireland's credit rating again due to the rising cost of recapitalizing Anglo Irish, pushing Dublin's borrowing costs to fresh peaks.
The government is expected to detail the bill for the aid to Anglo Irish later this week and Fitch's Pryce said that was an opportunity for authorities to build credibility in the market and shore up ratings.
"I think that Ireland has an opportunity to consolidate its position and further downgrades may be avoided," Pryce said. "But it clearly is going to be a close run thing."
That contrasts with comments from Fitch just a month ago when it said Ireland's 'AA-' rating was "robust enough" to cope with Ireland's problems, including Anglo Irish.
On Tuesday Pryce cited December's budget for 2011 and the government's decreasing majority in parliament as further risk factors.
"There are increasing risks but the Irish government may respond in a way which increases confidence," he said. "The Irish government has at least one more shot in its bow."
(Reporting by Andras Gergely; Editing by Carmel Crimmins)