UPDATE 4-Fitch elevates Peru rating to investment grade

(Recasts, adds comment from leading banker, pictures)

By Terry Wade

LIMA, April 2 (Reuters) - Fitch Ratings lifted Peru to investment grade on Wednesday, becoming the first major credit agency to award the coveted status to a country that investors once shunned for defaulting on its debts.

Surging growth and sound fiscal policies allowed Peru to reach investment grade before neighboring Brazil and Colombia, while moving closer to higher-rated Latin American credits like Mexico and Chile.

The upgrade comes after President Alan Garcia, a former leftist whose first term in the 1980s ended in economic chaos, signed a free-trade pact with the United States in December.

Finance Minister Luis Carranza said Peru is now "on the road to first world" standing after Fitch raised its foreign currency sovereign credit rating for the country to "BBB-" from "BB+" with a stable outlook.

Top executives said it showed the developing nation could withstand shocks and turmoil hitting the global economy.

"This is a sign that the country is protected from any important macroeconomic movement," said Walter Bayly, chief executive of Banco de Credito (CRE.LM: Quote, Profile, Research, Stock Buzz), Peru's largest bank.

The Andean country's government and companies will likely enjoy easier access to less expensive loans and attract more investment, especially if other large rating agencies raise their credit ratings for Peru.