Standard & Poor’s on 9 April affirmed the Dominican Republic’s long-term foreign currency sovereign credit rating of single-‘B’-plus and removed the rating from CreditWatch, where it was placed on Oct. 1, 1998, following damages caused by Hurricane Georges and the country’s subsequent rescheduling of external debt with Paris Club creditors. The outlook on the foreign currency rating is now stable. At the same time, Standard & Poor’s lowered the Dominican Republic’s short-term foreign currency rating to single-‘C’ from single-‘B’. Standard & Poor’s downgraded the Dominican Republic’s short-term foreign currency rating largely because of the country’s vulnerability to external shocks due to its weak liquidity position. In addition, Standard & Poor’s removed the Dominican Republic’s long- and short-term local currency issuer credit ratings from CreditWatch and changed the ratings to Selective Default (SD). Standard & Poor’s believes that the DR will continue to make Although small in amount (face value equal to 0.012% of 1998 GDP), the government is currently in default on six local currency bonds, including the electricity company capitalization bond of 2000 and the agrarian bonds of 1987 and 1992. However, the central bank is continuing to service its local currency counterpart obligations on a timely basis.
