Brazil is 1st country to get investment grade during global crisis
O Estado de S. Paulo
One year and a half after its main competitors awarded Brazil the investment grade yesterday was the turn of the credit rating agency Moody's to awarded it. It is a seal of quality that indicates that the probability of a bond issuer not paying its debt is low. Professionals of the financial market assess that, since it is being awarded late, the rating shall not have relevant practical implications for the Country. But they emphasized the symbolic effect of the measure, since Brazil was the first nation to receive such status amid the global crisis.
"Moody's rating is the cherry of a cake that was ready", affirmed Norberto Barbedo, vice-president of Bradesco. "The relevance of this investment grade is the moment in which it occurs: all have realized Brazil had a differentiated performance during the crisis", said the strategist of the WestLB Bank, Roberto Padovani. The reaction of the investors still yesterday confirms such expectation. The index of São Paulo Stock Exchange (Ibovespa) reduced the rising pace it registered up to the moment the information was announced. At the end of the trading, it went up 0.93%, to 61,494 points. In the exchange market, which was already closed at the time the announcement was made, the dollar fell 1% and closed at R$ 1.798, the lowest value in exactly one year.
The president of the Central Bank (BC in Portuguese), Henrique Meirelles, emphasized that Moody's classified Brazil as the winner. Besides promoting the Brazilian rating (to Baa3), Moody's let the path open for another increase, as it defined "positive" the perspective of the Country. "Many economic indicators point to a strong recovery (of Brazil), a "V" (shaped) resumption. If you take a look at different countries, both developing and developed, there are a few that have not been so affected by the crisis and have strong signs of recovery", observed Leos.