Moody's ups view on Peru bonds to positive

Moody's Investors Service said it changed the outlook to positive from stable Peru's Ba3 foreign-currency government bonds and Ba2 foreign-currency country ceiling for bonds to reflect significant reductions in Peru's external vulnerabilities as a result of a continuous decline in external debt indicators, further strengthening of the international reserve position and evidence of diversified and robust export growth.

The outlook of the government's Baa3 local-currency bonds, Baa1 local-currency deposit ceiling and A3 local-currency bond ceiling remains stable.

Indications that the Peruvian government does not need to access the international capital markets to cover its financing needs represent a positive development as it effectively reduces Peru's credit exposure to potential changes in international market conditions, the agency said.

While government's efforts have been effective in increasing local-currency funding in the domestic market, a latent credit vulnerability remains given the presence of a relatively high share of foreign-currency denominated debt, and this condition may operate as a restriction to future improvements in the government's credit rating, Moody's noted.

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