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Moody's places El Salvador credit on review for downgrade

Thursday, 17 September 2009 14:04

Moody's Investors Service on Monday placed El Salvador's credit rating on review for possible downgrade on the country's limited access to international financial markets and the impact of the global financial crisis.

El Salvador's "Baa3" foreign-currency government bond rating could be downgraded while the government's "Baa2" local currency bond rating -- a legacy of the period before dollarization was adopted -- was withdrawn.

"El Salvador's economic performance has been significantly worse than anticipated at the start of the global crisis, given its heavy dependence on the U.S. as an export market and a source of workers' remittances," said Mauro Leos, Moody's regional credit officer for Latin America.

"Still, the main reason for the weaker-than-expected outcome is the government's limited policy response capability coupled with restricted access to international capital markets."