Brazil’s Credit Rating Cut Further Into Junk Territory by S&P

Brazil’s debt rating was cut deeper into junk territory by Standard & Poor’s, which cited fiscal and political challenges for Latin America’s largest economy.

The long-term foreign currency rating was reduced one level to BB with a negative outlook, S&P said in a statement Wednesday. The new level, two steps below investment grade, puts Brazil on par with countries including Bolivia, Paraguay and Guatemala.

Brazil is in the midst of its worst recession in more than a century after a tumble in commodities and a slowdown in China, the country’s biggest trading partner, sapped revenue from exports including oil, iron ore and soybeans. The real has tumbled almost 30 percent in the past year, the worst performance among major currencies worldwide, after the country lost its investment-grade rating last year amid a record budget deficit and political turmoil that has hampered efforts to make fiscal adjustments.

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