Jamaica objects to downgrading of credit rating
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.