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Weekly Report - 25 February 2016 (WR-16-08)

BRAZIL: Moody’s downgrades Brazil to junk

Brazil’s battered economy took another blow on 24 February when Moody’s became the last of the three major credit rating agencies to strip the country of its investment grade status. The agency lowered Brazil’s ratings by two notches, from Baa3 to Ba2 with a negative outlook. Fitch Ratings lowered Brazil into junk territory in December, mirroring a similar move by Standard & Poor’s in September. Without doubt, the first and second downgrade had much greater economic significance; this final downgrade was widely expected and had little impact on the markets. However, it is another blow to President Dilma Rousseff’s handling of the economy, and another decision that will impact negatively on consumer sentiment in the country.

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