Caribbean360: Jamaica objects to downgrading of credit rating

Jamaica objects to downgrading of credit rating
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Chris Hoyos on 07/08/2009 13:37:30
 
KINGSTON, Jamaica, August 7, 2009 - The move by Standard and Poors (S&P) to 
downgrade Jamaica's long term sovereign credit rating to CCC+ isn't sitting well
with the island's government.
Finance Minister Audley Shaw is insisting that the ratings action "ignores
several positive economic developments that have taken place in recent weeks".
"In recent months, there have been continued signs of an improved outlook for
Jamaica's credit profile," he said, pointing to significant over-subscription of
locally issued debt, sharp reductions in market determined local interest rates,
sustained stability in the foreign exchange market, and tightening of the
spreads of government-issued foreign currency denominated debt traded in the
international capital markets.
Shaw said these developments have also been supported by Jamaica's application
to the International Monetary Fund (IMF) for a standby arrangement.
"We are confident that an IMF programme will enhance the already positive
trajectory in Jamaica's credit profile cited above. In addition, we believe that
an IMF programme will facilitate access to other multilateral funding sources
that will further reduce the Government of Jamaica's borrowing costs," Shaw
said.
"The Government believes that S&P's ratings action are out of context given
these developments."
He added that the Bruce Golding administration is not pursuing nor does it
intend to pursue any transaction with its domestic or external partners that
could be viewed in any way as a "distressed transaction" according to S&P's own
criteria.
The Finance Minister insisted that the government remains firmly committed to
honouring all of its local and international obligations and that the financial
sector continues to be strong, sound and well regulated by the Bank of Jamaica
and the Financial Services Commission.