Moody's considering Brazil downgrade to junk status because of the economic recession and rising political risk
Brazil's credit rating on watch lists, downgrade or to junk grade, Brazil economic recession, austerity ineffective and halt to political risks.
If Moody's is usually a three-month observation period after lowering its rating will become the second cancelled Brazil investment grade rating the rating agencies. After standard and poor's in September to Brazil the downgrade to junk status.
Meanwhile, Fitch, also in October, Brazil rating closer to junk status, Outlook negative, because of the economic recession, the Government's fiscal deterioration.
Brazil was again lowered to junk level, or will lead to capital outflows, because once there are two different rating agencies rated their speculative-grade, some foreign pension funds and other large investors will have to sell Brazil bonds.
according to Barclays analyst Bruno RoVai forecast Mu Diruo to downgrade Brazil rating may result in withdrawal of $ 1.6 billion investment in Brazil market.
by the standard and poor's Brazil after a rating downgrade to junk level, Brazil devaluation of the local currency, the real, in September to a record low, but rebounded further in the near future, because of concerns about the sudden outflow of funds to ease.
S?o Paulo, strategist at broker ICAp Juliano Ferreira said, "because the Fund restructuring are compulsory, so the impact is negative, but foreign investment in the market has had a fair degree of adjustment. Downgrade now possible dollars fled scale may appear differently in the past. "
Moody's said, as real and rapid deterioration of the macro-economic and financial situation, plus the next two trend reversal less likely, so the company's decision.