Not Even World's Highest Rates Keep Foreigners in Brazil Bonds
- Overseas holdings have fallen to the lowest since December
- Dropoff shows foreign investors' bearish outlook on Brazil
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The outlook for Brazil is so bad that even the highest interest rate among major economies can’t keep foreign investors in the market for government bonds.
Non-resident holdings of local notes have dropped to the lowest level this year amid growing speculation that President Dilma Rousseff won’t be able to fulfill promises to reduce government spending and shore up finances. Her pledge Monday to shut down 10 ministries and sell properties to raise cash failed to reverse a selloff in risky assets that sent yields on the country’s 10-year debt to a record 14.18 percent.