Shaw responds to S&P downgrade

The finance minister Audley Shaw has responded to Jamaica’s downgrade by Standard and Poors’ (S&P) calling it hasty and unwarranted.



The ratings agency yesterday downgraded Jamaica from ‘Triple C Plus’ to ‘Triple C’ and maintained a negative outlook for the economy.



Jamaica’s new triple C rating is just one notch above the default rating which would mean the country is having problem paying its debt.



One of the major reasons cited by S&P for the downgrade was the sudden resignation of the central bank governor Derrick Latibeaudiere on Friday.



Mr Latibeaudiere was Jamaica’s chief negotiator with the International Monetary Fund (IMF).



Jamaica is now seeking US$1.2 billion in a standby arrangement with the IMF.



S&P has also said Jamaica has increased spending while revenues have declined which has further pushed up the fiscal deficit.



However it’s the matter of the resignation of the Bank of Jamaica (BOJ) Governor that Mr Shaw has sought to address.



Mr Shaw said it’s unfortunate that S&P did not seek to get further and better particulars from him as minister about the departure of the BOJ governor.



He said that the departure of the Governor of the Bank of Jamaica is totally unrelated to the IMF discussions but instead to internal governance issues.



At the same time, Mr Shaw said the Government has moved quickly to appoint Financial Secretary, Dr Wesley Hughes, to lead the IMF negotiations.



Dr Hughes, who is a former deputy governor of the BOJ has served for 14 years as the director general of the Planning Institute of Jamaica.



He was also part of the negotiating team during the last IMF agreement with Jamaica in the 1990s.



In addition, Mr Shaw said the central bank, would see a smooth transition in leadership when Brian Wynter is appointed governor next month.



Mr Wynter is a former deputy central bank governor and a former head of the Financial Services Commission.



Senior central banker Audrey Anderson is now acting as governor.



Meanwhile, the finance minister is reporting that the IMF discussions are going well.



Mr Shaw has cited a statement from the IMF saying its team, which is now in Jamaica, is continuing to make progress in talks with the Government.



Mr Shaw said the team would make a further report at the end of this week when its members wrap up their visit.