The agency criticized that the measure has been approved despite opposition from the Executive.
Moody’s hit the table. The risk rating agency is the first among its peers to notice a effect on Chile’s sovereign note after yesterday Congress passed a bill that allows up to 10% of the funds accumulated in the AFPs to be withdrawn into law, in order to cover expenses during the health emergency.
In a statement signed by the vice president of Moody´s Investors Service, Ariane Ortiz-Bollin, the entity He emphasized that the approval of the regulation “is an event that can set a bad precedent from the sovereign credit point of view.”
Ortiz-Bollin argued that the bill came from Congress, not from the Executive, that “as established by the rules for any law that has a fiscal impact.”
“The approval was given without being involved in a technical analysis similar to that which regularly accompanies this type of measure,” said the executive.
To this he adds that the new law is in opposition to the agreement reached between the government and the opposition for an emergency plan to face the economic situation with up to US $ 12,000 million for the next 24 months, “which established a limit amount for the level of additional government spending that will now be exceeded. “
“In general, the measure could have negative credit implications for the sovereign if it represents a fundamental change in the way public policies are designed and approved in Chile,” Ortiz-Bollin warned.
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