MOSCOW (Sputnik) — The international rating agency Moody's downgraded Brazil's sovereign credit rating from Baa2, assigned to it four years ago, to Baa3, and changed its outlook to stable from negative, the agency said in a press release on Tuesday.
"In Moody's view, Brazil retains a number of credit strengths that are reflected in its Baa3 rating: its ability to withstand external financial shocks given ample international reserve buffers; a government balance sheet with relatively limited exposure to foreign currency debt and non-resident debt holdings compared with its peers; and a large and diversified economy," Moody’s published on its website.
According to the agency, the burden of government debt will continue to grow in 2015 and 2016, and will stabilize only "towards the end of this administration."
"Weaker-than expected economic performance, the related upward trend in government expenditures and lack of political consensus on fiscal reforms will prevent the authorities from achieving primary surpluses high enough to arrest and reverse the rising debt trend this year and next," the rating agency said.
In 2011, Moody's rating agency upgraded Brazil’s government bond rating from Baa3 to Baa2 with a positive outlook, which was then changed to stable, and in September 2014 to negative.
In May, the Brazilian currency has reached the 11-year low, falling to 3.19 reais per dollar, increased the fall throughout July, and headed for 3.53 reais per dollar on August 7. In 2011, one dollar was about 1.5 Brazilian reais.
