Fitch Gives Peru Investment Grade Rating
03 April 2008 @ 04:37 am EST
LIMA, Peru (AP) - Fitch Ratings has raised Peru's foreign currency debt rating to the investment-grade level of BBB-, handing a major win to market-friendly president Alan Garcia.
Booming economic growth has allowed Peru to pay debts ahead of schedule, contributing to the upgrade of its rating by one notch, from BB+, on Wednesday.
"This is important in the context of turbulence in international markets," Economy Minister Luis Carranza said at a news conference. "Peru is richer from today on because the properties and savings we have are going to be more valuable."
Financial analysts have lauded Peru as an attractive country for foreign investment, as the Andean nation experiences record economic expansion amid high commodities prices and strong growth of internal demand.
Peru's economy expanded 9 percent in 2007, its ninth consecutive year of growth, and booming construction and mining sectors are expected to produce continued strong growth in 2008. The economy grew 10 percent in January of this year alone.
Garcia's first term as president from 1985 to 1990 ended with Peru in financial ruin, as four-digit inflation angered consumers and sent investors fleeing.
But since winning re-election in 2006 on promises to avoid his previous missteps, Garcia has made Peru the first Andean country to secure a free trade agreement with the United States and is now aggressively pursuing a deal with China.
His economic policy is geared toward showing investors that Peru is a stable, strong economy.
Last month, the country bought back $838 million in Brady bonds and also announced that it would pay $1.1 billion in World Bank and Inter-American Development Bank loans ahead of schedule.
Standard & Poor's rating on Peru's long-term foreign currency sovereign credit is a double-B-plus, one step below investment grade. Moody's Investors Service has Peru's foreign-currency bond rating at Ba2, two steps below investment grade.
http://www.ibtimes.com/articles/20080403/fitch-gives-peru-investment-grade-rating.htm
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