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.