Robust economic growth and political stability continue to support the ratings on the Republic of Costa Rica, despite high fiscal deficits, rising (though still modest) debt burden, and a lack of consensus on passing long-awaited fiscal reforms. We have affirmed the 'BB/B' foreign-currency sovereign credit ratings on Costa Rica. In addition, we have lowered the local-currency sovereign credit rating to 'BB/B' from 'BB+/B' based on our revised methodology, in which limited monetary flexibility--reflecting Costa Rica's managed exchange rate regime--prevents a differential between local- and foreign-currency ratings. The stable outlook reflects our expectation that the government will implement timely measures to arrest fiscal deterioration. On Feb. 13, 2012, Standard&Poor's Ratings Services affirmed its 'BB' long-term and 'B' short-term foreign-currency
