JEDDAH, 6 April 2006 — Saudi Arabia’s expanding economy received a big boost yesterday as Standard & Poor’s Ratings Services raised its long-term foreign currency credit rating from ‘A’ to ‘A+’ on the basis of its excellent financial performance.
The rating agency also affirmed its long-term local currency rating at A+ and short-term sovereign credit rating at A-1. “The outlook on both the foreign and local currency ratings is stable,” the agency said in a statement.
“These S&P ratings reflect the strength of Saudi economy,” said Muhammad Al-Jasser, deputy governor of Saudi Arabian Monetary Agency (SAMA), who led the negotiating team for the credit rating. He attributed the upgraded S&P rating to the Kingdom’s excellent economic performance and prudent economic policies.
“This high rating from an international agency reflects the credibility and strength of the Saudi economy and the Kingdom’s reputation as an investment center thanks to its stability, and financial, political and economic strength,” the Saudi Press Agency quoted Al-Jasser as saying.
He said S&P’s ratings are highly valued by financial circles around the world, adding that investors and lenders take it as a major criterion while taking decisions. “This high ratings will certainly help Saudi companies attract foreign investment and get finance from internal and external sources at a lesser cost,” he said. In its statement, S&P said SAMA’s foreign reserves increased rapidly in recent years, and are expected to top $220 billion by year-end 2006 (from $92 billion in 2004), which is sufficient to cover about 23 months of current account payments (including private transfers).
