Andean Group - November 2021

PERU | Downgraded by Fitch. On 15 October the international credit ratings agency Fitch Ratings downgraded Peru’s long-term foreign currency issuer default rating (IDR) to ‘BBB’ from ‘BBB+’, maintaining its outlook as ‘stable’. Fitch explained that the downgrade “reflects the steady erosion over time of Peru’s sovereign balance sheet and other key rating metrics, as a result of a series of shocks”. Fitch also highlighted the current volatile political situation, noting that President Pedro Castillo’s government has advocated policies that “appear in conflict with the investment-driven and market-oriented, open economic model”. However, Fitch noted that a moderating cabinet reshuffle on 6 October had calmed the waters, “pivoting away from more radical positions on macro policy orientation and the rule of law, and could improve relations with congress”.

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