Moody's Downrades Belize Currency Ratings

by Amanda Banks, Tax-News.com, London

16 June 2003

The international ratings agency, Moody's Investors Service, has downgraded several aspects of the country's currency ratings and government backed securities in the light of increasing debt levels and falling credit worthiness.

The ratings agency has taken the decision to downgrade the country's foreign currency country ceiling for bonds and notes from Ba2 to Ba3. Additionally, the foreign currency country ceiling for bank deposits has been notched down from Ba3 to B1. Government backed foreign currency bonds were downgraded from Ba2 to Ba3 and Domestic currency nominated securities dropped to Ba2 from Ba1.

Moody's commented that their ratings were as a consequence of a build up in public debt resulting from a recent policy of fiscal expansion. However, the ratings agency noted that debt ratios were not set to decline dramatically in the near term, and maintained a stable outlook for the nation.

The agency also observed that a recent change in economic policy to a tighter fiscal and monetary stance should not result in any further significant deterioration in the country's credit worthiness, though Moody's maintained that Belize remains open to external economic shocks despite attempts to diversify the economy.

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