Here's What Brazil Investors, Lawmakers Are Saying About S&P Cut
- Currency could plunge to 3.90 per U.S. dollar: Brasil Plural
- Government reaffirms commitment to fiscal consolidation
Brazil's Credit Rating Downgraded to Junk
Brazil had its credit rating cut to junk by Standard & Poor’s on Wednesday after the close of markets, with a negative outlook. The downgrade sent the ETF that tracks Brazilian shares plunging in late trading. Here’s what lawmakers and investors are saying:
MARKET REACTION:
* Brasil Plural: "If the timing of the downgrade was only mildly surprising, the combination of downgrade with negative outlook is a genuine negative surprise," according to a note signed by Mario Mesquita, partner and chief-economist at the firm and a former central bank director. Asset prices should react "in a major way," with the currency likely to breach 3.90 per U.S. dollar on Thursday and stocks selling off. Other rating companies will probably follow S&P in downgrading, according to the note.