Moody's may lower Jamaica

Moody's Investors Service said it has placed Jamaica's ratings on review for downgrade because the ongoing crisis is exerting significant pressures on the country's external and fiscal positions, which are expected to intensify and could further deteriorate credit risk relative to peers.

Placed on review for downgrade are the B1 foreign-currency and the Ba2 local-currency government bond ratings as well as the B2 foreign-currency bank deposit ceiling, the agency said.

"Despite the government's adequate policy response and continued strong commitment to servicing its obligations, the challenges imposed by the global financial crisis and economic slowdown are simply too severe for Jamaica to avoid an increase in credit risk," said Moody's vice president - senior analyst Alessandra Alecci.

"The government's precarious debt dynamics and onerous debt burden, which exceeds 125% of GDP, leave very little room to absorb shocks of this magnitude."

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