08:39 | New York (U.S.), May. 28.
Peru was among the first nations in the region to impose forceful quarantine measures. In tandem, the Government announced a package of fiscal measures including tax deferrals, direct transfers to vulnerable families, payroll and liquidity support for businesses, and extensive budgetary reallocations in favor of health services, Moody's has recalled.
Most Latin American countries have implemented fiscal measures to mitigate the economic effects of the crisis. The size and effectiveness of the policy response has varied, with Brazil, Chile and Peru implementing sizable and wide-ranging measures, it said.
In the case of Peru, the Central Reserve Bank has cut its policy rate by 100 basis points to 0.25%, and injected liquidity in the financial system via repo operations.
Besides, its Banking Superintendence has allowed financial entities to reprogram loan repayments without affecting the credit ratings of corporates or individuals, and to use a countercyclical provisioning buffer given that capitalization ratios are well above regulatory minimums.
"Chile and Peru likewise have adopted measures that have so far replenished liquidity," it stressed.
Banking
In April, Moody's changed the outlook on the banking systems of some countries.
"The negative outlooks reflect our expectation that the broad and growing scope of economic and market disruption from the coronavirus outbreak will increasingly strain the operating environment for banks and their loan performance," it said in this sense.
Editor's note: Based on information provided by Moody's.
(END) NDP/MVB
Published: 5/28/2020