(Updates with closing peso price, analyst quotes)
BOGOTA, March 9 (Reuters) - Colombia’s economy can weather the global impact of coronavirus, the government and central bank said on Monday, while analysts and traders warned the fall-out could lead to a reduction in credit ratings.
Nearly 112,000 people have been infected by coronavirus and 3,884 have died, according to a Reuters tally. Infections have been reported in more than 100 countries and disrupted global markets.
Colombia’s peso closed down 6.29% at a record low of 3,831.01 to the dollar on Monday, while the stock exchange closed temporarily in the afternoon after a 10% fall, as low oil prices roiled markets.
Crude is the country’s top export and source of foreign exchange.
“The fundamentals of the Colombian economy are still solid and will absorb the described external shocks without severe trauma to financial activity and stability,” the finance ministry, central bank and the financial regulator said in a joint statement.
The financial system has adequate indicators of solvency, liquidity and risk management, the statement added, but the government and policymakers will keep an eye on possible fiscal implications.
“The authorities will take pertinent actions in a coordinated way and the decisions will be announced jointly and when appropriate,” the statement added.
“One hoped for something more convincing - it’s a politically correct statement,” said Otman Gordillo, economist at AdCap brokerage in Bogota. “I think there are the conditions to do something.”
Latin America’s fourth-largest economy expanded 3.3% last year, well above other countries in the region. The government has revised down its target for this year’s growth to 3.7%, from 4%.
The impact of the virus could mean the country misses the mark on its fiscal deficit target of 2.2% of GDP for this year, given its dependence on oil income. Failure to meet targets might lead to a credit rating downgrade.
“There are clearly much bigger implications than just the fall in oil prices, which will obviously provoke a fall in exports and a fiscal impact,” said Camilo Perez of Banco de Bogota. “This accentuates the risk of an adverse movement in the rating.”
Fitch is expected to visit the country in April. (Reporting by Nelson Bocanegra Writing by Julia Symmes Cobb; Editing by Cynthia Osterman and Dan Grebler)