Fitch Ratings evaluates Cape Verde in terms of long-term foreign currency risk

The long term domestic currency rating was classified as BB-. The perspective regarding the two ratings is stable and the country’s plafond was rated as B+.

According to Fitch Ratings, the B+ long-term foreign currency evaluation is supported by the progress made by Cape Verde in the realm of economic reform, the reduction in budget imbalances and foreign debt, and the increase in international reserves.

The outlook is also supported by Cape Verde’s political stability, a key factor for the attraction of foreign investment and the development of tourism.

According to Fitch ratings, the Cape Verdean economy in 2005 has seen a higher-than-forecast growth rate, with increasing revenues from tourism, remittances from Cape Verdean émigrés and direct foreign investment. The agency believes that this positive evolution is the result of the successful reforms carried out by the Cape Verdean government.

London-based Fitch Ratings is one of the world’s most prestigious ratings companies. Its classifications in terms of sovereign risk are used as a guide by investors before deciding where to apply their international funds. Cape Verde’s appearance in the Fitch Ratings guide, particularly in such a comfortable position, is in itself an important reference at a time when the archipelago is seeking to internationalize its economy.

The sovereign risk classification represents the likelihood that a particular country will liquidate its commitments fully and in a timely fashion. It is considered a reliable evaluation of the political, economic and social evolution of a given country and permits comparisons with other nations.

Source: A Semana Online (November 20, 2005)

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