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BOGOTA, March 16 (Reuters) - Standard & Poor’s rating agency on Wednesday raised Colombia to investment grade, citing the economy’s growing resilience to external shocks and its favorable growth prospects.
S&P‘S decision will attract a new class of investors to Colombia, lowering government borrowing costs, spurring investment and supporting economic growth in Latin America’s fourth-largest petroleum producer.
The agency said it had raised Colombia’s foreign currency sovereign rating to its lowest investment grade status of BBB-/A-3.
Colombia lost investment grade as a result of its 1999 economic crisis. Wall Street began to see a turn-around in the country with the 2002 election of Alvaro Uribe, who used U.S. military aid to beat back leftist rebels and improve security.
President Juan Manuel Santos, who came to office in August, has continued popular security policies but also introduced wide-ranging fiscal, economic and political reforms which were praised by investors for attacking stubborn deficits.
The country is already enjoying a boom in oil and mining investment as violence from its long war has eased.
Reforms include a plan to better distribute oil royalties, use excess oil revenue to pay off debt and create a oil savings fund to protect the economy during down times.
Writing by Patrick Markey, Bogota newsroom; Editing by Diane Craft