NEW YORK–(BUSINESS WIRE)– Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) and Country Ceiling for the Dominican Republic as follows:
–Foreign currency IDR at ‘B’;
–Local currency IDR at ‘B’;
–Foreign currency short-term IDR at ‘B’;
–Country ceiling at ‘B+’.
The Rating Outlook is maintained as Positive.
The Positive Outlook reflects the Dominican Republic’s good macroeconomic performance, improving prospects for higher export earnings due to the development of the mining sector, and increased availability of external and domestic financing sources. However, Fitch notes that the uncertainty surrounding the IMF program and the upcoming electoral cycle, as well as risks stemming from the global economy presently detract from the sovereign’s improving credit profile.
The Dominican Republic’ ratings are underpinned by moderate debt levels, higher GDP per capita than peers, relatively strong social development indicators, and a competitive business environment that supports foreign direct investment inflows.
In spite of growth slowing down to an estimated 4.4% in 2011, the Dominican Republic’s five-year average growth performance remains in line with peers. Inflation, averaging approximately 8.5% in 2011, is lower than the ‘B’ category median. The expected move to a formal inflation-targeting regime in 2012 could further enhance macroeconomic stability over the medium term.
‘Rising mining export volumes are strengthening the capacity of the economy to generate larger and more resilient current external receipts, mitigating long-standing external balance sheet vulnerabilities,’ said Cesar Arias, Associate Director in Fitch’s Sovereign Group. As a result, Fitch expects the current account deficit to fall below the ‘B’ median of 5% of GDP by 2013.
‘The sovereign has benefited from broad multilateral financial support, sustained access to international capital markets and the rapid development of the domestic bond market,’ added Arias. Moreover, the Treasury has pre-funded its entire 2012 external market issuance program and secured USD1 billion in budget support and project financing for 2012.
Buoyed by multilateral disbursements, reserves remain at historic highs and above the adequacy targets agreed with the IMF, supporting the sustainability of the managed exchange rate. Nevertheless, external liquidity ratio, at 97% in 2012, is significantly weaker than peers, and the country’s external financing needs are among the highest in the ‘B’ category.
Thus, Fitch notes that preserving macroeconomic stability and the continued support from multilaterals remains important for anchoring investor confidence and reducing external vulnerabilities.
A narrow revenue base and burdensome electricity subsidies have slowed fiscal consolidation and delayed the full implementation of the IMF’s Stand-By Arrangement and the concomitant disbursements. Yet, Fitch estimates that fiscal deficit was moderate in 2011 owing to expenditure restraint and additional receipts from the tax reform. Moreover, government debt, at 29% of GDP, remains lower than peers, and amortization payments are manageable in comparison to ‘B’ and ‘BB’ peers.
Moving forward, greater confidence in the ability of the next government to maintain macroeconomic stability and broad multilateral financing support would be positive for creditworthiness. A sustained reduction in the country’s external vulnerabilities would also put upward pressure on the ratings. On the other hand, a sharp decline in non-debt-creating capital inflows or a confidence shock as a result of the electoral process resulting in currency pressures and a marked erosion of international reserves would be negative for the ratings.
Additional information is available at ‘www.fitchratings.com’. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
–’Sovereign Rating Methodology’ (Aug. 15, 2011).
Applicable Criteria and Related Research:
Sovereign Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648978
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM’. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE
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2012年1月2日星期一
Indonesia Regains Investment Grade as Fitch Raises Its Rating
December 15, 2011, 4:18 PM EST
By Novrida Manurung
Dec. 16 (Bloomberg) — Indonesia regained investment grade rating for its sovereign debt at Fitch Ratings after 14 years, as Southeast Asia’s largest economy withstands faltering global growth and contains borrowings.
The country’s long-term foreign and local currency debt was raised to BBB- from BB+, Fitch said in a statement yesterday. The outlook on both ratings is stable. Indonesia lost the investment grade rating in December 1997, during the Asian financial crisis. The rating puts the nation on the same level as India.
“The upgrades reflect the country’s strong and resilient economic growth, low and declining public-debt ratios, strengthened external liquidity and a prudent overall macro policy framework,” Philip McNicholas, director in Fitch’s Asia- Pacific Sovereign Ratings group, said in the statement.
Indonesia’s standing with rating companies has improved as President Susilo Bambang Yudhoyono targets growth of as much as 6.6 percent on average through the remainder of his term ending in 2014, pledging to spur investment and reduce the budget deficit. The country’s economy, which avoided the contraction that neighbors Singapore, Malaysia and Thailand suffered during the 2009 global slump, has expanded more than 6 percent this year even as Europe’s debt crisis threatens Asian exports.
“This doesn’t give us immunity,” Helmi Arman, an economist at Citigroup Inc. in Jakarta, said after Fitch released the announcement. “But they’re going to have a broader investor base in the market because of this move. It will certainly improve our resilience.”
Rupiah Performance
The rupiah has outperformed every Asian currency except the Japanese yen, Chinese yuan and the Hong Kong dollar this year, and Indonesia’s benchmark stock index is the fourth-best performer in the region. The currency slid 0.04 percent to 9,090 a dollar yesterday, according to prices from local banks compiled by Bloomberg.
Government bonds gained earlier yesterday. The yield on the 8.25 percent note due July 2021 declined four basis points, or 0.04 percentage point, to 6.25 percent, according to midday prices from the Inter-Dealer Market Association. It reached 6.06 percent on Dec. 6, the lowest since the securities were sold in July last year.
Demand for Indonesian bonds will increase following Fitch’s move, Rahmat Waluyanto, director general at the finance ministry’s debt management office, said in Jakarta yesterday. Capital inflow, especially foreign direct investment, will likely increase, he said in a mobile-phone text message.
‘Waited a Long Time’
“We’ve waited for this upgrade for a long time, in line with our effort to implement consistent and careful economic policies,” Hartadi Sarwono, deputy governor at the central bank, said in a mobile-phone text message in Jakarta yesterday. “Indonesia’s economic prospects will be better with lower risk and borrowing costs supporting financing of economic activities.”
Moody’s Investors Service raised the nation’s rating in January to Ba1. In April, Standard & Poor’s increased Indonesia’s long-term foreign-currency rating one level to BB+ from BB, with a positive outlook. The ratings are one level below investment grade.
Indonesia’s performance contrasts with that of European nations, whose borrowing costs have soared as the debt crisis deepened.
European Union
European Union leaders agreed at a Dec. 8-9 summit in Brussels to tighter control of tax and spending by governments that overstep the bloc’s deficit limit of 3 percent of gross domestic product. They also pledged a faster start to a 500 billion-euro ($652 billion) rescue fund. Standard & Poor’s and Moody’s Investors Service are reviewing the agreement and its implications for credit ratings on euro countries.
Fitch projects Indonesia’s GDP growth will average more than 6 percent per annum over the period to 2013, it said in yesterday’s statement.
“Indonesia’s domestically-oriented economy and success in delivering relatively strong economic growth without the creation of external imbalances, or a reliance on short-term external financing suggests economic growth prospects should prove resilient to external shocks, as was the case in 2008,” Fitch said. “Low public debt and positive real interest rates give the authorities policy flexibility to respond to any slowdown.”
–With assistance from Berni Moestafa and Hidayat Setiaji in Jakarta. Editors: Stephanie Phang, Greg Ahlstrand.
To contact the reporter on this story: To contact the reporter on this story: Novrida Manurung in Jakarta at nmanurung@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
http://tourism9.com/
By Novrida Manurung
Dec. 16 (Bloomberg) — Indonesia regained investment grade rating for its sovereign debt at Fitch Ratings after 14 years, as Southeast Asia’s largest economy withstands faltering global growth and contains borrowings.
The country’s long-term foreign and local currency debt was raised to BBB- from BB+, Fitch said in a statement yesterday. The outlook on both ratings is stable. Indonesia lost the investment grade rating in December 1997, during the Asian financial crisis. The rating puts the nation on the same level as India.
“The upgrades reflect the country’s strong and resilient economic growth, low and declining public-debt ratios, strengthened external liquidity and a prudent overall macro policy framework,” Philip McNicholas, director in Fitch’s Asia- Pacific Sovereign Ratings group, said in the statement.
Indonesia’s standing with rating companies has improved as President Susilo Bambang Yudhoyono targets growth of as much as 6.6 percent on average through the remainder of his term ending in 2014, pledging to spur investment and reduce the budget deficit. The country’s economy, which avoided the contraction that neighbors Singapore, Malaysia and Thailand suffered during the 2009 global slump, has expanded more than 6 percent this year even as Europe’s debt crisis threatens Asian exports.
“This doesn’t give us immunity,” Helmi Arman, an economist at Citigroup Inc. in Jakarta, said after Fitch released the announcement. “But they’re going to have a broader investor base in the market because of this move. It will certainly improve our resilience.”
Rupiah Performance
The rupiah has outperformed every Asian currency except the Japanese yen, Chinese yuan and the Hong Kong dollar this year, and Indonesia’s benchmark stock index is the fourth-best performer in the region. The currency slid 0.04 percent to 9,090 a dollar yesterday, according to prices from local banks compiled by Bloomberg.
Government bonds gained earlier yesterday. The yield on the 8.25 percent note due July 2021 declined four basis points, or 0.04 percentage point, to 6.25 percent, according to midday prices from the Inter-Dealer Market Association. It reached 6.06 percent on Dec. 6, the lowest since the securities were sold in July last year.
Demand for Indonesian bonds will increase following Fitch’s move, Rahmat Waluyanto, director general at the finance ministry’s debt management office, said in Jakarta yesterday. Capital inflow, especially foreign direct investment, will likely increase, he said in a mobile-phone text message.
‘Waited a Long Time’
“We’ve waited for this upgrade for a long time, in line with our effort to implement consistent and careful economic policies,” Hartadi Sarwono, deputy governor at the central bank, said in a mobile-phone text message in Jakarta yesterday. “Indonesia’s economic prospects will be better with lower risk and borrowing costs supporting financing of economic activities.”
Moody’s Investors Service raised the nation’s rating in January to Ba1. In April, Standard & Poor’s increased Indonesia’s long-term foreign-currency rating one level to BB+ from BB, with a positive outlook. The ratings are one level below investment grade.
Indonesia’s performance contrasts with that of European nations, whose borrowing costs have soared as the debt crisis deepened.
European Union
European Union leaders agreed at a Dec. 8-9 summit in Brussels to tighter control of tax and spending by governments that overstep the bloc’s deficit limit of 3 percent of gross domestic product. They also pledged a faster start to a 500 billion-euro ($652 billion) rescue fund. Standard & Poor’s and Moody’s Investors Service are reviewing the agreement and its implications for credit ratings on euro countries.
Fitch projects Indonesia’s GDP growth will average more than 6 percent per annum over the period to 2013, it said in yesterday’s statement.
“Indonesia’s domestically-oriented economy and success in delivering relatively strong economic growth without the creation of external imbalances, or a reliance on short-term external financing suggests economic growth prospects should prove resilient to external shocks, as was the case in 2008,” Fitch said. “Low public debt and positive real interest rates give the authorities policy flexibility to respond to any slowdown.”
–With assistance from Berni Moestafa and Hidayat Setiaji in Jakarta. Editors: Stephanie Phang, Greg Ahlstrand.
To contact the reporter on this story: To contact the reporter on this story: Novrida Manurung in Jakarta at nmanurung@bloomberg.net
To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net
http://tourism9.com/
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