Feb. 13 (Bloomberg) -- Costa Rica’s local-currency debt rating was lowered by Standard & Poor’s, which cited the country’s “limited monetary flexibility” and rising government spending.

S&P cut Costa Rica’s local-currency credit rating to BB, or two levels below investment grade, from BB+. S&P affirmed Costa Rica’s foreign-currency credit ratings at BB, on par with Guatemala and Turkey.

The ratings “balance the country’s limited monetary flexibility as well as rising fiscal pressures with good economic prospects, stable political system and relatively high level of social development,” S&P said in a statement.

Costa Rica’s monetary policy lacks flexibility because of the “high level” of dollarization in the economy, S&P said.

--Editors: Brendan Walsh, David Papadopoulos

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To contact the editor responsible for this story: Laura Zelenko at lzelenko@bloomberg.net;