Standard & Poor's places Brazil on CreditWatch

Standard & Poor's rating agency on Monday (22) announced it placed Brazil's sovereign credit rating in local and foreign currency on CreditWatch with negative implications. In a statement, the agency said “Brazil's political backdrop has once again become more complicated.”

According to S&P, the decision “reflects increased risk that a disruptive or slow resolution of recent political developments could delay and undermine the ability of Brazil's political class to advance corrective policy measures in a timely fashion--in this instance, ahead of the 2018 presidential and legislative elections--while its economic and fiscal challenges continue to mount.”

In a statement, the Finance Ministry pointed out the CreditWatch move has been a short-term warning that could be undone if the political uncertainty ends soon. The ministry noted Standard & Poor's recognizes the need for such measures as the pension reform.

“The Ministry of Finance reaffirms its commitment to the recovery of Brazil's economy through structural reforms aimed at balancing public accounts,” the ministry statement read.

Translated by Mayra Borges