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Economy | 29 June, 2009 [ 18:57 ]

Fitch affirms Peru's ratings, despite internal conflicts

Andina

Credit rating agency Fitch Ratings said it maintains Peru's long-term foreign currency IDR at BBB- and long-term debt local currency IDR at BBB, and stable outlook on both despite recent local conflicts.

"We maintain our positive outlook for Peru, but obviously we are monitoring the situation, we believe that it is unlikely that Peru's ratings could change in the near term", said Theresa Paiz Fredel, Senior Director for Latin American Sovereign Ratings.

Peru's robust fiscal and external solvency ratios, as well as high external liquidity, support the country's sovereign ratings.

These strengths sufficiently counterbalance the country's key credit weaknesses, including a concentrated export base, weaker social and governance indicators relative to similarly rated peers and still high dollarization.

"Peru's solid macroeconomic fundamentals have increased the economy's capacity to withstand a commodity price collapse, a recession in the world's advanced economies, as well as reduced capital and financial flows," said Paiz.

Of the challenges facing all emerging markets, the collapse in commodity prices will affect Peru the most, contributing to lower exports and private capital inflows, as well as reduced fiscal revenues.

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