SANTO DOMINGO.- Dominican Republic’s sovereign credit rating were affirmed by Standard & Poor's Ratings Services, by removing its 'B+/B' from CreditWatch, where it was placed on Feb. 8, 2008, “with negative implications because of uncertainty concerning payment and legality of government promissory notes due between March and July 2008,” said Thomson Financial quoted by Reuters.

“The outstanding promissory notes, part of a series totaling $130 million issued through 2006 to SunLand Corp. and subsequently sold to non-resident investors, fell into arrears in Sept. 2007. The arrears were cleared by early 2008, and a local bank bought the notes in February 2008,” Reuters reported.

Standard and Poor’s also said the outlook on the Dominican Republic is negative, “reflecting its widening fiscal and current account deficits, which led to diminishing external liquidity. S&P said it also reflects the growing risk that lower external liquidity and rising macroeconomic strain could hurt creditworthiness.”

It said successful implementation of policies that lower fiscal and external vulnerabilities but do not lead to a hard landing of the economy could result in revising the outlook to stable.

S&P, “expects that recently announced fiscal measures, including controls on spending, could, if successfully implemented, cut overall fiscal deficit to about four percent of GDP this year and perhaps 3.4 percent in 2009 versus a projected six percent deficit in 2008 without corrective fiscal measures,” Reuters said.