Credit ratings agency Moody's Investors Service has downgraded Brazil's foreign currency bonds, notes and bank deposits.
The agency cited concerns that further currency depreciation will overburden on dollar borrowers.
Moody’s downgraded Brazil's country ceiling for foreign currency bonds and notes to B2 from B1, and the country ceiling for foreign currency bank deposits to B3 from B2. It said the outlook for the new ratings is stable. Moody's said that no matter which candidate wins this Autumn's presidential election, the new administration will face growing fiscal pressures that could translate into risks in the external sector.
Although the recently announced IMF program should help to stabilise the near-term situation as regards foreign-currency credit risk, Moody's believes "the back-loaded and conditional nature of the program leaves a risk that the next administration will face challenges in meeting IMF targets on a sustained basis".
AFP