The company’s vice president Stephen Hess was in the country conducting an investigation on the country’s economic situation, meeting with government officials, Reserve Bank of Fiji and players in the private sector.
“We come from time to time to update ourselves and make sure that we feel comfortable with the ratings at the level that it’s at,” Hess said.
“And during this particular visit, a few weeks ago we put the rating of Fiji on review for a possible downgrade. That means that there is a possibility that we might move Fiji’s rating down and we will make a decision on that based partly on the information that we gathered during this visit here,” he said.
“The most important thing that we are looking at is the level of international reserves of the country, which are held mainly by the Reserve Bank, and that level has fallen quite substantially during the course of the last year and continues to fall in the latest month.”
Hess said the level of reserves was now low compared to the country’s need for foreign exchange not only to pay its debt, which was not that large, but also to pay for imports.
Asked about the impact of the downgrade, he said Fiji did not have a lot of debt in the market.
“There is only one international bond issue and so the rating change does not have a direct impact very much,” Hess said.
However, he added: “It does, I think, probably, if it should happen, would affect investors’ view of the country by not just people who buy bonds but investors in all sectors. They may take that into account as part of their thinking about opportunities in Fiji.”
Late last month, Melbourne-based Standard & Poors rating service lowered Fiji’s outlook from stable to negative.
But Hess said Moody’s rating of a possible downgrade was more negative in the sense that it was headed for a possible downgrade.
He said the decision would be announced some time in May.
