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LatinNews Daily - 20 May 2021

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In brief: S&P downgrades Colombia’s credit rating to below investment grade

* International credit ratings agency Standard & Poor’s (S&P) has downgraded Colombia’s foreign currency sovereign credit rating from ‘BBB-’ to ‘BB+’ with a ‘stable’ outlook. Colombia's credit rating is now below investment grade for the first time in over a decade. A note from S&P explained that the reclassification was made after mass protests forced the government to withdraw its tax reform bill, “which has resulted in a significantly lower likelihood of Colombia improving its fiscal position following a recent and marked deterioration”. The credit ratings agency explained the ‘stable’ outlook as a result of “our expectation for an institutional solution to recent and significant social unrest”. Whilst noting that “Colombia’s rating fundamentals remain weaker than those of similarly rated peers”, S&P said that the country is still creditworthy on account of its monetary policy, its flexible credit line with the International Monetary Fund (IMF), and access to international debt markets.