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Thursday, March 05, 2009
THE deepening global financial crisis has negatively impacted Jamaican bonds with one of the world's leading rating agencies, Moody's Investors Service, yesterday taking the decision to downgrade Jamaica's government bonds.
The foreign currency and local currency ratings for the bonds have been revised to B2 from B1 and Ba2, respectively, and the foreign currency country ceiling for deposits was revised to B3 from B2. All other ratings remained unchanged and the outlook on all ratings was stable.
The rating action was predicated on Moody's anticipation that Jamaica's key macroeconomic indicators will deteriorate in 2009. The deterioration is a global phenomenon, and Jamaica is particularly vulnerable as a small, very open economy.
This decision comes just before the Government's highly anticipated budget where debt servicing and the ability to raise the requisite revenues have been of particular concern.
But it was not all gloom for Jamaica.
".In recognition of Jamaica's proven ability to navigate through situations of high volatility, Moody's Investors Service expects Jamaica to continue its strong commitment to debt servicing. The Government of Jamaica has also entered into a number of arrangements with multilateral agencies, which Moody's Investors Service noted could prove to be quite beneficial in a situation of extreme stress," the rating agency said.
The rating action announced yesterday concludes a review of Jamaica's credit risks that began in November 2008.
In response to this downgrade, the Ministry of Finance said: "The Government of Jamaica remains committed to fiscal prudence and policy initiatives geared towards the preservation of sound macroeconomic fundamentals."
THE deepening global financial crisis has negatively impacted Jamaican bonds with one of the world's leading rating agencies, Moody's Investors Service, yesterday taking the decision to downgrade Jamaica's government bonds.
The foreign currency and local currency ratings for the bonds have been revised to B2 from B1 and Ba2, respectively, and the foreign currency country ceiling for deposits was revised to B3 from B2. All other ratings remained unchanged and the outlook on all ratings was stable.
The rating action was predicated on Moody's anticipation that Jamaica's key macroeconomic indicators will deteriorate in 2009. The deterioration is a global phenomenon, and Jamaica is particularly vulnerable as a small, very open economy.
This decision comes just before the Government's highly anticipated budget where debt servicing and the ability to raise the requisite revenues have been of particular concern.
But it was not all gloom for Jamaica.
".In recognition of Jamaica's proven ability to navigate through situations of high volatility, Moody's Investors Service expects Jamaica to continue its strong commitment to debt servicing. The Government of Jamaica has also entered into a number of arrangements with multilateral agencies, which Moody's Investors Service noted could prove to be quite beneficial in a situation of extreme stress," the rating agency said.
The rating action announced yesterday concludes a review of Jamaica's credit risks that began in November 2008.
In response to this downgrade, the Ministry of Finance said: "The Government of Jamaica remains committed to fiscal prudence and policy initiatives geared towards the preservation of sound macroeconomic fundamentals."
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