Downturn and Dollar Menace Peru Banks

Downturn and Dollar Menace Peru Banks

Peru

Moody’s predicts stability in the Peruvian banking system, although it sees risks from a protracted economic downturn that would negatively affect loan growth as well as business volumes, while pushing up delinquencies. It also sees international EM investor risk aversion constraining Peruvian banks’ access to alternative dollar funding needed for growth, and says high dollarization is a latent risk to bank asset quality and earnings. “Given the much lower growth outlook for Peru in 2010 and the

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