LONDON (Standard&Poor's) May 3, 2002--Standard&Poor's said today it affirmed all its ratings on the Republic of Iceland, including the single-'A'-plus/'A-1'-plus foreign currency issuer credit ratings, balancing the country's ability to react to economic challenges against external imbalances. The outlook remains negative. "The swift and nonrecessionary reduction of external imbalances in 2001 highlighted Iceland's capacity to absorb economic shocks. The government has also made important progress in consolidating public finances and is expected to continue on this course after the current hiatus," said Standard&Poor's credit analyst Moritz Kraemer. "Nevertheless, the ratings remain constrained by external debt ratios, which have rapidly risen to levels untypical of similarly rated sovereigns." Despite a faster-than-expected reduction of the current
