PHILIPSBURG – The recent downgrading of St. Maarten to a BAA2 from a BAA1 is extremely worrying, and demands the urgent attention of Parliament and Government, said United People’s Party (UPP) Member of Parliament (MP) Tamara Leonard.
The MP intends to request an urgent meeting of Parliament to learn from Finance Minister Richard Gibson how Government intends to tackle this serious blow to the country’s standing in the financial world and its attractiveness for investors at home and overseas.
Concurrently, Moody’s has lowered the local currency bond and deposit ceilings to A2 from A1, and the foreign currency bond ceiling to A3 from A2. The foreign currency deposit ceiling was also lowered to BAA2 from BAA1.
The lowered currency bond and deposit ceilings are worrying, said MP Leonard. Representatives of the Central Bank of Curaçao and St. Maarten (CBCS) will also be requested to attend the urgent session with the Finance Minister.
“Their input is very much needed for Parliament to get the full scope of what this lowering of the currency bond and deposit ceilings mean. Parliament has to be armed with information to instruct Government on ways to fix this very serious blow to our country,” said MP Leonard.
Moody’s Investors Service downgraded St. Maarten’s issuer rating to BAA2 from BAA1 on Monday, April 4. The outlook on the rating is stable. A key driver for the downgrade is slower than expected progress in development of institutional strengths including fiscal and monitoring capabilities in the aftermath of Country-within-the-Dutch-Kingdom status as of 2010.
Also noted by Moody’s is St. Maarten’s slow economic growth, which limits the country’s ability to manage adverse external conditions.
The stable outlook reflects Moody’s expectation that fiscal support from the Netherlands (AAA stable) will limit significant increases to St. Maarten’s debt burden