Moody's: The outlook for Brazil's credit rating has been downgraded from "positive" to "stable"

Moody's rating agency has stated that it is downgrading the Brazilian government's rating outlook from "positive" to "stable", and predicts that interest payments on Brazilian government debt will increase. Moody's stated that the change in outlook reflects "reduced credit upward risk due to a significant deterioration in debt burden, slower progress in addressing expenditure rigidities and building credibility around fiscal policy despite adherence to fundamental balance targets." Brazil's real GDP growth remains strong, but rising inflation and inflation expectations have led the central bank to tighten monetary policy again. Moody's stated that due to the sensitivity of Brazil's government debt structure to interest rate changes, interest payments will increase significantly, leading to higher overall fiscal deficits and debt accumulation than previously expected. Meanwhile, Moody's also confirmed Brazil's long-term local and foreign currency issuer ratings and senior unsecured debt ratings at Ba1.