Thursday, September 10, 2015

Global Economy Heading Into Contraction

Brazil's sovereign debt rating has been cut from BB-plus (the highest junk rating) to BBB-minus by Standard & Poors. The faster than expected downgrade comes as the Brazilian economy enters recession. Mounting political problems, a muddled economic policy, and slowing global economy has sent Latin America's largest economy into recession. The downgrade will likely send the Brazilian currency, the real, plunging to a 13-year low.

Headline: Brazil's credit rating downgraded to junk

The country's debt was downgraded by Standard & Poor's Wednesday after markets closed.

S&P rated Brazil's debt BB+ with a negative outlook, which means another cut is possible. Junk status will make it harder and more expensive for Brazil to borrow money.



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