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Barbadian dollar in danger - Moody's

Published:Friday | July 25, 2014 | 12:00 AM

Promoted International credit-rating agency, Moody's, has warned that with Barbados' foreign reserves standing below the 2013 level, strain could be put on the dollar.

"Any further erosion in reserves would likely put further pressure on Barbados' currency, which is pegged to the US dollar," Moody's stated in a July 21 report.

The agency issued its analysis based on the Central Bank of Barbados' fiscal first-quarter report issued on July 15.

The analysis is titled, 'Barbados' Mounting Fiscal Challenges and Persistent Economic Weakness Are Credit Negative'.

"After recovering slightly during the previous three quarters, foreign-exchange reserves have resumed their decline, and as of 30 June remained around 25 per cent below early-2013 levels," Moody's noted. "This decline occurred despite a slight recovery in long-term private financial inflows that traditionally help support the central bank's international reserves," Moody's said.

- CMC