The Moody’s rat­ings agency yes­ter­day kept the Gov­ern­ment’s longterm lo­cal and for­eign cur­ren­cy is­suer and se­nior un­se­cured rat­ings at Ba2, but changed the out­look to neg­a­tive to re­flect what it views as short-term down­side risks.

In a news re­lease, the Min­istry of Fi­nance said Moody’s af­fir­ma­tion of Trinidad & To­ba­go’s Ba2 rat­ing is pred­i­cat­ed on the ro­bust cred­it strengths of our coun­try—in­clud­ing the ex­is­tence of sub­stan­tial fis­cal buffers such as the Her­itage and Sta­bil­i­sa­tion Fund (HSF) and cash equiv­a­lent as­sets, amount­ing to 45 per cent of GDP—as well as the ex­pec­ta­tion of pos­i­tive oil and gas pro­duc­tion de­vel­op­ments by 2027.

The out­look was changed to neg­a­tive based on the de­cline in the Cen­tral Bank’s liq­uid for­eign ex­change re­serves, which un­for­tu­nate­ly, ac­cord­ing to their method­ol­o­gy, does not in­clude the HSF.

“While our cred­it rat­ing was main­tained just as we ex­pect­ed,” says Ho­n­ourable Min­is­ter Dav­en­dranath Tan­coo, “my on­ly rec­om­men­da­tion was that Moody’s should have tak­en a few more months to as­cer­tain the im­pact of the re­cent­ly im­ple­ment­ed Gov­ern­ment strate­gies—a com­pre­hen­sive pol­i­cy agen­da aimed at re­bal­anc­ing growth, re­vi­tal­is­ing the econ­o­my, se­cur­ing a sus­tain­able fis­cal tra­jec­to­ry and sta­bil­is­ing for­eign ex­change re­serves.

“To ad­just in De­cem­ber pri­or to af­ford­ing the mea­sures the op­por­tu­ni­ty to take ef­fect in Fis­cal 2026 was too pre­ma­ture in our view.

“The de­cline in Moody’s nar­row de­f­i­n­i­tion of for­eign ex­change re­serves hap­pened to be the con­tribut­ing fac­tor in their neg­a­tive out­look. Their de­f­i­n­i­tion of for­eign ex­change re­serves not on­ly ex­cludes gold and Spe­cial Draw­ing Rights, but, more crit­i­cal­ly, ig­nores all the sig­nif­i­cant for­eign cur­ren­cy as­sets man­aged by oth­er eco­nom­ic agents” added the Ho­n­ourable Min­is­ter.

“In­deed, Trinidad and To­ba­go’s net in­ter­na­tion­al in­vest­ment po­si­tion cur­rent­ly stands in sur­plus to the sce­nario un­der­pin­ning their rat­ings—no­tably based on the de­cline in the Cen­tral Bank’s liq­uid for­eign ex­change re­serves, which un­for­tu­nate­ly ac­cord­ing to their method­ol­o­gy does not in­clude the HSF.

In Ju­ly, Stan­dard and Poor’s (S&P) main­tained T&T’s cred­it rat­ing at in­vest­ment grade BBB-, but changed the out­look to neg­a­tive.