20 Dec 2015
Fitch Ratings Downgrades Brazil
Second of the 3 leading rating agencies downgraded Brazil's credit rating to junk status BB+
Fitch Ratings downgraded Brazil on December 16, to rating BB+, the highest junk rating. In justifying the decision, Fitch highlights the continued increase in public debt, the continued political stand-off, and the deeper than expected recession.
Fitch Ratings thereby follow the downgrading to junk by S&P made in September. Though some fund managers will be forced to sell Brazilian assets now that 2 agencies has graded Brazil as junk, the move by Fitch was widely expected by the market, and will therefore most likely not have any major impact. The local currency, the Real, dropped 2% against the USD on the day of the announcement, but has 2 days after recovered half of this loss.