S&P and Fitch React to Panama’s FATF Success – What it Means for Investors

The removal of Panama from the Financial Action Task Force (FATF) gray list received positive assessments from two major global credit rating agencies, Fitch Ratings and Standard & Poor’s. Despite this development, they emphasized that this decision will not alter the country’s credit ratings or outlooks.

Joydeep Mukherji, Managing Director of Sovereign Ratings at S&P Global, stated to local Panamanian media that the exclusion from the FATF list is a positive step for Panama’s financial system. However, he underscored that this action will have no impact on the credit rating. Similarly, Todd Martinez, a sovereign analyst at Fitch Ratings, also welcomed the news, agreeing that it aligns with their prior expectations.

Both analysts reiterated that Panama’s removal from the gray list will not influence the country’s ratings or outlooks according to their respective assessments. Mukherji mentioned that Panama’s rating and outlook remained unaffected when it initially appeared on the FATF list, as they trusted in an appropriate response from the government, with minimal or no disruption to the banking system.

Martinez, on the other hand, emphasized that the delisting will not have a significant impact on resolving the Negative Outlook, as this is more related to increasing fiscal challenges. It is noteworthy that Panama’s removal from the FATF list was achieved after fulfilling the 15 points of its Action Plan, as reported by government and private sector representatives, who believe this will facilitate foreign direct investment and enhance the business environment in the country.