Brazil Ratings Put on Review for an Increase by Moody’s to Investment Grade

July 6 (Bloomberg) -- Brazil’s credit ratings were put on review for an increase to investment grade by Moody’s Investors Service, which cited the country’s “demonstrated resilience to shocks” in the global economy. Bonds gained and stocks and the currency pared losses.

Moody’s placed both the country’s foreign and local ratings of Ba1, or one level below investment grade, on review for upgrade. Moody’s is the only of the three major rating companies that has Brazil below investment grade. Both Standard & Poor’s and Fitch Ratings raised Brazil to BBB-, the lowest investment grade rating, last year.

The global credit crisis and recession have uncovered “underlying structural strengths” in Latin America’s biggest economy, Moody’s said. The country had record foreign reserves of more than $200 billion when the financial crisis deepened in September, allowing the central bank to sell dollars and contain the real’s declines while it simultaneously cut interest rates to a record low to shore up growth.

“The Brazilian authorities’ policy response has been effective in containing the impact of the global crisis, thus providing evidence of increased resilience to shocks, a characteristic integral to an investment-grade credit profile,” Moody’s said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a29J2WmIaD0s

 

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