Economic assessment to cost US$80k

This was disclosed yesterday by Finance Minister Colm Imbert in Parliament as he responded to a question by Pointe-a-Pierre MP David Lee about the cost of the assessment.

Imbert said the Ministry of Finance approached Fitch Ratings, which he says is the third of the three largest credit rating agencies, for a costing to conduct a private rating. He said the cost provided by the agency was “within the normal range of charges for services of this nature.” He said the decision to pursue this credit rating agency followed ratings by Standard and Poors (S&P) and Moody’s.

He said Moody’s downgraded this country to Ba1from Baa3 and assigned a stable outlook up from the negative outlook in 2016.

While S&P, who visited the country in April , lowered its long term sovereign credit ratings on TT and revised the country’s outlook to stable from negative in 2016. He said the country’s transfer convertibility assessment was also downgraded to A from AA- while the short term soverign rating was affirmed at A-2.

Imbert said the Ministry was of the view that the downgrade by Moody’s was unjustified given the country’s significant buffers. He said it was difficult to understand how this country could be deemed a moderate credit risk given particular characteristics.

“Firstly, net official reserves of US$9 billion or ten months import cover, a Heritage and Stabilisation Fund of US$5.64 billion, the equivalent of 25 per cent of GDP and deposits in sinking funds for the express purpose of repaying debt totalling $6.5 million. Given the ample buffers just highlighted the Government has the ability to repay the country’s external debt several times over. Given this discrepancy it was considered prudent for the Government to seek a third credit rating in an attempt to eliminate the discrepancy that currently exists,” he said.

Fitch Ratings is expected to visit the country for its first rating assignment in October this year.