Brazil’s financial markets fell on Thursday after Standard & Poor’s cut the country’s sovereign rating to junk late Wednesday, though assets began to pare losses in late morning trading as the downgrade had been largely priced in.
The drop from investment grade, which came sooner than many in the market had expected, reflected President Dilma Rousseff’s struggle to regain investor confidence as political turmoil drives a growing government deficit in Latin America’s largest economy.
Brazil’s currency, the real , fell nearly 3 percent to 3.9 per U.S. dollar, a 13-year low, before backing off to 3.88 per dollar, still 2 percent down on the day, after the central bank intervened.
The central bank said it will sell as much as $1.5 billion on the spot market through repurchase agreements on Thursday, a measure that helps to support the real.
The bank carried out a similar operation on Tuesday.
Brazil Energy Insight 
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