Brazil’s credit rating nears junk status after Moody’s downgrade

Caitlin Morrison
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Brazilian President Dilma Rousseff, in power since 2011
Moody’s cut Brazil’s credit rating to near-junk status yesterday, the second rating downgrade the country has sustained since President Dilma Rousseff came to power in 2011.

The decision comes two weeks after rival ratings firm Standard & Poor’s (S&P) warned Brazil could lose its investment grade if fallout from a number of corruption investigations weighs further on economic growth. In March 2014, S&P downgraded Brazil’s long-term debt rating to BBB minus, its lowest investment-grade rating.

Vice President Michel Temer warned Rousseff on Sunday that Brazil could become the next Greece if congress did not start helping the government’s austerity drive, a source said.

Moody’s assigned a stable outlook to the new rating, signalling that the country’s investment grade status is safe in the short term.

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