International credit rating agency Standard and Poor’s on Tuesday night issued a statement reiterating its double-B sovereign rating for Brazil but withdrawing a “credit watch” observation. Withdrawal of the “credit watch” observation relieves Brazil of the possibility of a sudden ratings downgrade. Instead, S&P will maintain an “negative outlook” for the rating, meaning it can be revised downward but only after a process of review. In its statement, S&P said Brazil’s economic prospects were slowly improving while its political situation appeared to be more stable now than in previous months. S&P noted that Brazil still faces difficult fiscal and political problems, including persistent deficits and general and presidential elections in 2018. A double-B rating is two notches below investment grade.
Link to Standard and Poor’s release.
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