Chile’s strength following the catastrophe of 27 February 2010 means that post-quake implications did not destabilize its institutions. A report by international risk rating agency Fitch Ratings indicated that the country’s financial solvency is intact and its financial flexibility remains at the agency’s current credit ranking.
The agency confirmed Chile’s long-term foreign currency sovereign rating at “A”. This was due to a proper macroeconomic policy for the territory, with fiscal stabilization assets, solid institutions and public and foreign debt ratios much lower much lower than average “A” countries.
Fitch Ratings sees the financing combination for reconstruction as well-balanced and indicative of Chile’s economic flexibility. However, the agency believes that caution is necessary regarding the country’s slight dependency on stabilization fund assets and foreign debt, which could limit pressure on the Chilean peso.
Current conditions indicate that Chile’s proper credit ranking level, with fiscal policies based on standards, could favor the Chilean government’s efforts to continue with its four-year post-quake reconstruction plan.
This post is also available in Spanish