S&P ups DR ratings

[NewsWhore]

Standard & Poor's Rating Services says the Dominican Republic risk factors have improved. The ratings agency raised the long-term sovereign credit rating on the DR to a B+ from a B, with a stable outlook. The stable outlook reflects continued strong economic prospects and the rising international reserves. S&P, however, kept the short-term sovereign credit rating of the DR at B.The upgrade is due to the initiation of structural changes that can have a positive effect on government management policies and the fiscal balance. S&P's ratings also reflect the fiscal improvement generated by the tax reform measures created at the end of 2006. Richard Francis, the S&P analyst, underlined the fact that the structural reforms created under the auspices of the IMF "will improve" the formulation of policies and their supervision. He pointed out the recent laws criminalizing electricity theft and providing for the recapitalization of the Central Bank over a 10-year period. The analyst sees as positive the creation of the new Ministry of the Treasury (Hacienda), which replaced the old Ministry of Finance. The new ministry is responsible for complete supervision of all aspects of budget and public debt management. The DR-CAFTA agreement also figured in the analyst's final assessment of the Dominican risk factors. On the downside, the S&P report points out continued institutional weakness, the Central Bank deficit and the shadow of the upcoming elections looming over the country.

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