Fitch Upgrades Brazil Credit Ratings, Outlook Revised to Stable

Fitch Ratings upgraded a number of its credit ratings on Brazil Monday morning:

• Foreign currency IDR from BBB- to BBB
  
• Local currency IDR from BBB- to BBB
  
• Country ceiling from BBB to BBB+
  
• Short-term IDR from F3 to F2

The firm revised its Rating Outlook on Brazil from Positive to Stable.

Fitch said the ratings upgrade reflects the agency's "assessment that the sustainable potential growth rate of the Brazilian economy has increased to 4%-5%, supporting the medium-term fiscal outlook and the continued strengthening of its external liquidity position, which increases the country's shock-absorption capacity. The transition of power to the Rousseff administration has been smooth and the consensus on responsible macroeconomic policies remains well-anchored. Moreover, the Rousseff administration has displayed signs of greater fiscal restraint, which coupled with healthy growth prospects should allow for a fall in Brazil's heavy general government debt burden."

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