Standard and Poors warns of credit rating vulnerability

[Tuff Gong]

Wed May 25, 2005
Standard and Poors warns of credit rating vulnerability

Standard & Poor's Rating Service has warned Jamaica and four other countries that their credit ratings remain vulnerable to interest and exchange rate shocks.
In a report released Tuesday, Standard and Poor's assessed the public sector and external debt trajectories of 11 emerging markets under conditions of increased interest rates and local currency depreciation.

It said the ratings on Jamaica, Brazil, Hungary, the Philippines and Turkey would come under pressure from rising real interest rates.

Jamaica currently has a B/Stable rating for current long term foreign currency and outlook.
Standard and Poors warns of credit rating vulnerability

[Q3210]

Re: Standard and Poors warns of credit rating vulnerability

What does this mean in layman`s language?

[Wahalla]

Re: Standard and Poors warns of credit rating vulnerability

Meams when the goverment trys to borrow from insitution they will charge above base rates esspecially for short term financing..... Ultimaely money from the international markets will be harder to source..

[Q3210]

Re: Standard and Poors warns of credit rating vulnerability

What has brought about this credit rating?
Have we been delinquent in paying back?
This is not good news. Knowing the Minister of Finance, he will pretend this is fiction and wont respond.
The local media, kittens of the press, do not ask and demand answers. They remain submissive and servants to the masters knowing that it would be out of their mind to interrogate the boss.

At least RJR issues this a news item.
Where are our journalist?
Where is the Opposition Leader and Where is Audley Shaw?
Like the shake elsewhere, cant this add to an avalanche of missappropriations of public money and breach on credit?

[Wahalla]

Re: Standard and Poors warns of credit rating vulnerability

Originally posted by Q3210:
[qb] What has brought about this credit rating?
Have we been delinquent in paying back?
This is not good news. Knowing the Minister of Finance, he will pretend this is fiction and wont respond.
The local media, kittens of the press, do not ask and demand answers. They remain submissive and servants to the masters knowing that it would be out of their mind to interrogate the boss.

At least RJR issues this a news item.
Where are our journalist?
Where is the Opposition Leader and Where is Audley Shaw?
Like the shake elsewhere, cant this add to an avalanche of missappropriations of public money and breach on credit? [/qb]

I am no economist but I think this is just a warning... To sort of tell the Jamaicans economist that they have some issues to addres....

It would be interesting to find out what against which forgien currency they expect the shock to come from.... I susect that they are suggesting the US dollar will appriciate against the Euro. As Jamaicans dollar seems linked to the US dollar.. And I noted that the good doctor has been raising money in Europe.. to keep his reserves up. If there is an appriciation of the dollar vs the Euro then the value of the Jamaioan current account would fall... In Europe if this is the case the central bank simply increase the base rate. This causes a influx in the currency relatite to others. (Investors would convert into that currency.) As a weapon of currency intrest rates dont work in Jamaica... But the otehr alternative is cut down on goverment use of forgien exchange...

what do I know ?????

[Q3210]

Re: Standard and Poors warns of credit rating vulnerability

A whole lot of cents. You dont sound like a samfie man.
How will govt. honour contractual agreements already in consideration, payments in foreign currency?
Where and how will Govt. take on projects in the future with such a shaky rating?
More importantly, how will govt. service debt?
And the present debt will increase monumentally just by a fickle increase in interest rates.
I dont know where The Best Minister of Finance Jamaica has ever seen, Omar `Clueless` Davis will get more to borrow so as to service debt.