S&P lowers Chile local-currency rating

Standard & Poor’s said it affirmed the AA- long-term foreign-currency sovereign credit rating on the Republic of Chile.

The agency also said it lowered the long-term local-currency sovereign credit rating on Chile to AA from AA+.

The outlook is stable.

S&P also said it affirmed the country’s A-1+ short-term sovereign credit ratings. The AA+ transfer and convertibility assessment for Chile is unchanged.

The agency said it believes that Chile has developed solid capabilities to run countercyclical fiscal and monetary policies to withstand low commodity prices and an unfavorable external environment.

The ratings on Chile are based on its low debt burden, political stability and flexible and resilient economy, which give the government significant capacity to introduce countercyclical policies to absorb adverse external shocks, S&P said.

Rating constraints include the country’s high dependence on its natural resources, as well as its low per capita income compared with that of similarly rated sovereigns, the agency said.

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