Fitch affirms Costa Rica

Fitch Ratings said it affirmed the Republic of Costa Rica's long-term foreign and local currency ratings of BB and BB+, respectively. The outlook is negative.

The ratings have remained on a negative outlook since 2003, reflecting Fitch's continuing concerns that the government is not taking sufficient measures to solidify public finances in order to preserve macroeconomic stability over the medium term.

This, combined with the country's crawling peg exchange rate regime, limited "usable" international reserves as well as a relatively weak banking sector have increased the vulnerability of Costa Rica to external shocks, the agency noted.

Fitch said credit strengths include Costa Rica's stable political system as well as good social indicators.

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