Rousseff impeachment would be neutral “at best” for Brazil’s rating: Moody’s

An impeachment of President Dilma Rousseff would be credit neutral “at best”, but more likely negative for Brazil’s teetering credit rating, Moody’s top Latin American analyst said on Wednesday.

Rousseff’s political opponents are seeking her impeachment saying she has mismanaged a once-booming economy and undermined confidence.

Senior Moody’s analyst Mauro Leos said along with the performance of Brazil’s economy in the next couple of years, the decision on whether to cut will depend on Rousseff’s future and whether finance minister Joaquim Levy, respected by investors, keeps his position.

“From our perspective, we would see an impeachment as at best credit neutral, but our inclination would be to see it as credit negative because of the uncertainty that would be related to the whole process,” Leos said at Moody’s investment day.

Speaking on the sidelines afterwards, he told Reuters it was more likely that the rating’s outlook would be dropped to ‘negative’ from its current ‘stable’, rather than cutting the rating itself straight to junk, on an impeachment.
Read more