DBRS affirms Peru

DBRS said it confirmed the Republic of Peru's long-term foreign currency debt and long-term local currency debt at BBB (low).

The trend is stable.

The stable trend balances the resilience of Peru's economy, which is quickly recovering from the global financial crisis, with a relatively unpredictable political environment ahead of the 2011 presidential elections, DBRS said.

The ratings are supported by sound macroeconomic management, Peru's good track record of controlling inflation, its well regulated financial system, a strong liquidity position, greater openness to trade, and investment and productivity-enhancing structural reforms, DBRS said.

The ratings also consider the risk of a return to populist policies, regional inequality, social conflict, the fragmented nature of the political party system, the weak institutional capacity of the public sector, Peru's exposure to the commodity-price cycle and the high level of financial dollarization, the agency said.

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