Sovereign Risk Ratings: Things Are Different This Time

monetary policy, comparisons with previous rate-cutting episodes in 1998 and 2001 will inevitably be made. Although it is risky to rely too much on historical parallels, it is worth examining whether Latin America is at risk of experiencing the same level of economic dislocation seen in both of those crises. It is our contention that for Latin America, it is indeed 'different this time'. Our view is that most Latin countries have taken advantage of a benign external environment over the past few years by building up external reserves, extending debt maturities and anchoring the fiscal accounts.

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