The Minister of Economy and Finance, Azucena Arbeleche, He valued the government’s management by pointing out that “at this time Uruguay has the highest credit rating in its history”, after echoing the improvement of the rating by Moody’s.
Along these lines, Arbeleche stated that “three of the five rating agencies to which Uruguay asked them to evaluate us, they place us one step away from category A-“, because Standard & Poor’s(S&P) had done so in April 2023 and Rating and Investment (R&I) maintained it last December.
The minister called a press conference to refer to the improvement of the credit rating to Baa1 from Baa2 and recalled: “It has been 10 years since Moody’s did not move the grade he assigned to Uruguay. The last time was in 2014.”
“These elements are important and we think it is very important to analyze the fundamentals behind the improvement. I want to focus on three aspects that are mentioned in the report: the strength of the fiscal policy, the lowering of the inflation and the social security reform The head of the MEF said about the rating agency’s report.
Moody’s arguments highlighted by the MEF
During the press conference, which was also attended by the director of Economic Policy, Marcela Bensión; the undersecretary Alejandro Irastorza; and the director of the Debt Management Unit, Herman Kamil, Arbeleche echoed a document issued by the MEF with the main arguments for the improvement of the grade.
Among the key points that Moody’s took into account are “the institutional solidity”, but also the fulfillment of the fiscal and monetary policy, anticipating that “a trend of investment stronger will support better performance of economic activity.”
On the other hand, he highlighted the increase in “the “fiscal credibility” and the adoption of reforms that allowed “the institutional framework to be more robust and resistant to shocks, strengthening the sovereign’s credit profile.”
Finally, they highlighted the decrease in the inflation and they pointed out that “the BCU has modernized the monetary policy framework, has improved the effectiveness of monetary instruments and has enhanced communication with the market.”
“Moody’s expects inflation to remain within the target range for the rest of the year, in part, thanks to a better anchoring of inflation expectations,” the rating agency concluded.
Source: Ambito
