Moody's: IMF agreement vital for Jamaica

Moody's Investors Service said the stable outlook on the B2 government bond ratings of Jamaica reflect its expectations for a standby agreement with the International Monetary Fund to address financing shortfalls exacerbated by the global crisis.

The agency finds that the Jamaican government's announcement earlier in the week that it will not pursue a voluntary domestic debt exchange - despite considerable challenges - underscores the importance the government places on maintaining its creditworthy reputation.

"Multilateral disbursements and a standby agreement with the IMF will prove vital to preserving liquidity and closing the financing gap this year," Alessandra Alecci, a vice president and senior analyst in Moody's sovereign risk group, said in a statement. The agreement is likely to incorporate strict macroeconomic reform conditions, particularly on the fiscal front, in order to address structural impediments to debt sustainability, Moody's said.

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