Peru

Fitch upgrades Peru credit rating


Published

Peru has received good news in another upgrade from a ratings agency. The Fitch Ratings Agency has upgraded Peru’s credit rating from BBB to BBB+.

In its press release the Agency said “Peru’s upgrade is underpinned by the strength of the sovereign’s external and fiscal balance sheets, continued growth outperformance in relation to ‘BBB’ peers and a long track record of macroeconomic and financial stability. Peru’s established track record of policy coherence and credibility as well as the sovereign’s fiscal and external financing flexibility underpin its strong shock absorption capacity. Finally, continued pragmatism under the Humala administration and a steady progress on reforms suggests that the risk of a marked departure of economic policies has reduced”.

The government response as published on the presidential website is as follows:

“Rating upgrade boosts Peru’s status as investment hotspot

Peruvian Minister of Economy and Finance Luis Castilla said Wednesday that Fitch’s new BBB+ rating for Peru places the Andean country above Mexico and Brazil and only below Chile in the region.

In a press conference after the Cabinet’s weekly meeting, Castilla said that this is good news amid ongoing uncertainty in international markets, “because it cements the country’s status as a top investment destination.”

“The country’s solvency has strengthened and this automatically translates into a reduction in external capital cost for both the Republic of Peru and the private sector,” he explained.

Fitch Ratings on Wednesday upgraded Peru’s long-term foreign Issuer Default Ratings (IDR) to ‘BBB+’ from ‘BBB’ and the long-term local currency IDR to ‘A-’ from ‘BBB+’.

“Peru’s upgrade is underpinned by the strength of the sovereign’s external and fiscal balance sheets, continued growth outperformance in relation to ‘BBB’ peers and a long track record of macroeconomic and financial stability,” the ratings agency said in a statement.

Fitch, whose decision follows an upgrade from Standard & Poor’s to BBB-plus in August, added that conservative policy making and a pragmatic approach to attract private investment continues under Peru’s President Ollanta Humala.”

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