Brazil celebrated a landmark improvement in its debt rating on Wednesday, as Standard & Poor?? Ratings Services (S&P) issued a long awaited-upgrade that sent Brazilian stocks soaring.
The move to investment grade status represents a key benchmark in the booming nation?? economic transformation, signaling that Brazil is now officially recognized as a safe place for investors to park money. Strong foreign investment could increase as a result even as the rest of the world suffers financial jitters.
??razil is entering into the club of the most respected nations,??Brazilian Finance Minister Guido Mantega said.
Brazilian President Luiz Inacio Lula da Silva called it ?? conquest by the Brazilian people they??e been waiting for many, many years.??
S&P?? announcement comes just two months after Latin America?? largest country emerged as a net foreign creditor, prompting the Central Bank to declare Brazil?? debt crisis over.
??he upgrades reflect the maturation of Brazil?? institutions and policy framework, as evidenced by the easing of fiscal and external debt burdens and improved trend growth prospects,??S&P credit analyst Lisa Schineller said in a statement announcing the rating boost.
Brazil?? benchmark Ibovespa stock market index jumped 6.3 percent on the news, closing at a record 67,869.
The Brazilian real also rose sharply against the US dollar.
Central Bank President Henrique Meirelles said it illustrated the newfound stability of Brazil?? once notoriously volatile economy.
Brazil defaulted on its debt and declared a moratorium on debt payments in the 1980s, but predictable monetary policy and steady growth in recent years have most experts calling the boom-and-bust economic cycles a thing of the past.
Brazil is also riding on a boom in demand for beef, iron ore, soy and other key exports.
Its trade surplus came in at US$40 billion last year, and international reserves nearly tripled from US$64 billion in 2003 to US$188.2 billion in February, the Central Bank said.
Coupled with rising foreign investment and high domestic interest rates, net currency inflows reached a record US$87.5 billion last year.
Brazilian companies are also raking in record profits as businesses take out loans to expand and droves of consumers buy new cars and homes on credit.
While Moody?? Investors Service and Fitch Ratings still rate Brazilian debt at one notch below investment grade, the S&P upgrade is a huge victory for Silva. When he was elected in 2002, some investors predicted the once-radical union leader would wreck the economy.
Instead, Silva surprised financial players and angered his leftist base by sticking to an orthodox monetary policy. This brought bigger corporate profits, but also helped the poor by reducing inflation and creating more jobs in the nation of nearly 190 million.
Brazil now appears on track for sustained economic growth of between 4 percent and 4.5 percent, following gains of 5.7 percent last year, Schineller said.
Despite a global credit crunch, this ??aturing growth outlook??makes Brazil an attractive investment option, S&P said, noting that direct foreign investment is on track to match last year?? US$34.6 billion record.
Rainfall is expected to become more widespread and persistent across central and southern Taiwan over the next few days, with the effects of the weather patterns becoming most prominent between last night and tomorrow, the Central Weather Administration (CWA) said yesterday. Independent meteorologist Daniel Wu (吳德榮) said that based on the latest forecast models of the combination of a low-pressure system and southwesterly winds, rainfall and flooding are expected to continue in central and southern Taiwan from today to Sunday. The CWA also warned of flash floods, thunder and lightning, and strong gusts in these areas, as well as landslides and fallen
WAITING GAME: The US has so far only offered a ‘best rate tariff,’ which officials assume is about 15 percent, the same as Japan, a person familiar with the matter said Taiwan and the US have completed “technical consultations” regarding tariffs and a finalized rate is expected to be released soon, Executive Yuan spokeswoman Michelle Lee (李慧芝) told a news conference yesterday, as a 90-day pause on US President Donald Trump’s “reciprocal” tariffs is set to expire today. The two countries have reached a “certain degree of consensus” on issues such as tariffs, nontariff trade barriers, trade facilitation, supply chain resilience and economic security, Lee said. They also discussed opportunities for cooperation, investment and procurement, she said. A joint statement is still being negotiated and would be released once the US government has made
SOUTH CHINA SEA? The Philippine president spoke of adding more classrooms and power plants, while skipping tensions with China over disputed areas Philippine President Ferdinand Marcos Jr yesterday blasted “useless and crumbling” flood control projects in a state of the nation address that focused on domestic issues after a months-long feud with his vice president. Addressing a joint session of congress after days of rain that left at least 31 dead, Marcos repeated his recent warning that the nation faced a climate change-driven “new normal,” while pledging to investigate publicly funded projects that had failed. “Let’s not pretend, the people know that these projects can breed corruption. Kickbacks ... for the boys,” he said, citing houses that were “swept away” by the floods. “Someone has
‘CRUDE’: The potential countermeasure is in response to South Africa renaming Taiwan’s representative offices and the insistence that it move out of Pretoria Taiwan is considering banning exports of semiconductors to South Africa after the latter unilaterally downgraded and changed the names of Taiwan’s two representative offices, the Ministry of Foreign Affairs (MOFA) said yesterday. On Monday last week, the South African Department of International Relations and Cooperation unilaterally released a statement saying that, as of April 1, the Taipei Liaison Offices in Pretoria and Cape Town had been renamed the “Taipei Commercial Office in Johannesburg” and the “Taipei Commercial Office in Cape Town.” Citing UN General Assembly Resolution 2758, it said that South Africa “recognizes the People’s Republic of China (PRC) as the sole
RSS