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Financial analyst cautioning against Fitch upgrade

Published:Thursday | February 18, 2010 | 12:50 PM

One of the country’s leading financial analyst is cautioning against complacency following Jamaica’s recent upgrade from international rating agency Fitch.



On Tuesday Fitch upgraded the country’s long term local and foreign currency Issuer Default Ratings (IDR) to B minus.



The rating outlook was also upgraded from “negative” to “stable.”



Fitch attributed the rating revision to the recent approval by the International Monetary Fund (IMF) of a US$1.27 billion standby arrangement and the success of the Jamaica Debt Exchange Programme.



But Ralston Hyman explains that there is still a significant amount of work to be done to achieve and maintain stability in the country’s economy and to meet the IMF requirements.



The government has said that the upgrade by Fitch at this time sends a significant signal to international and local investors and should help to reinforce confidence in the market for Jamaica’s debt.

Meanwhile, Economist Dennis Chung said Fitch’s upgrade shows that Jamaica’s credit score is already improving as a result of the deal with the IMF.



He says the upgrade to B minus also shows that Jamaica is now considered a lower risk in terms of the country’s ability to repay its loans.



According to Mr Chung the upgrade is not necessarily indicative of a change in the country’s long-term economic situation.