S&P trims Chile’s long-term foreign currency rating

S&P said it lowered its long-term foreign currency sovereign credit rating on the Republic of Chile to A+ from AA- and its long-term local currency rating to AA- from AA. The outlook on the long-term ratings is stable.

At the same time, S&P lowered its short-term foreign currency rating to A-1 from A-1+ and affirmed the A-1+ short-term local currency rating. In addition, S&P lowered its transfer and convertibility (T&C) assessment for Chile to AA from AA+.

S&P said the downgrade reflects prolonged subdued economic growth that has hurt fiscal revenues, contributed to increases in the government's debt burden, and eroded the country's macroeconomic profile. This has resulted in a modest increase in Chile's vulnerability to external shocks, the agency added.

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