|
 The Brazilian stock exchange (Bovespa), this Friday, May 2, in its first trading session since Brazil was raised to investment grade by Standard and Poor's (the Bovespa was closed for the May Day holiday) opened strong and even broke a record before slowing down during the day.
A little after the session was opened for business, the Ibovespa, the Bovespa's main index, surpassed for the first time 70,000 points going as far as 70,973 points before backtracking.
The Ibovespa ended up closing at a record level: 69,366 points, 2.21% more than the previous trading session. The dollar, on the other hand, reached its lowest value in nine years: 1.65 reais for one dollar.
Rating agency Standard & Poor's, one of the main international rating agencies, announced this week that it has increased the Brazilian credit rating to "investment grade." With this, Brazil entered the group of countries considered to be of low risk to investors.
The agency elevated the Brazilian rating from BB+ to BBB-, classifying the country as investment grade. The announcement, made in the afternoon, generated an immediate reflex. Ibovespa, the main index of the São Paulo Stock Exchange, posted appreciation of 6.33%, the greatest increase since October 17, 2002, and reached almost 68,000 points, a historic record.
The volume of papers traded during the day of the announcement (April 30) was over 9.7 billion Brazilian reais (US$ 5.7 billion). On the exchange market, the American dollar suffered depreciation of 2.52% and at the end of the day, one dollar was being sold for 1.633 reais.
Standard & Poor's raised the country's sovereign long-term credit rating from BB+ to BBB-, and the long-term local currency sovereign credit rating from BBB to BBB+, among other reclassifications. The agency classified the long-term perspective for the country rating as "stable", which means that the grade should be maintained for a long time.
According to a statement by the rating agency, the new rating reflects the country's maturity and that of its economic policy, with the reduction of fiscal imbalances and of the foreign debt, which "declined dramatically", according to S&P.
This year Brazil rose to being a net foreign creditor. S&P also pointed out that there was an improvement in perspectives for growth of the economy.
The press statement points out that public debt remains high, but that the history of pragmatic fiscal management and debt policies reduces the risk in the area.
The Brazilian government disclosed figures showing that in the first three months of this year the public sector posted a primary surplus, economies made for payment of interest on the debt, of over 43 billion reais (US$ 25.2 billion), or 6.39% of the Gross Domestic Product (GDP).
The target for the year is 3.8% of the GDP. With greater economy, the public administration obtained a nominal surplus, after payment of interest, of over 3 billion reais (US$ 1.8 billion) in the first quarter.
The agency points out that the force of confidence in Brazil resides in factors like the continuation of the economic policy, despite government changes, focussing on the control of inflation and on the regime of fluctuating exchange rates, low foreign debt and a public dept profile in the same line as that of other nations with similar risk classification.
The press statement adds that the country has reasonably transparent institutions that, aligned to pragmatic and forecastable policies, made the country reach a good grade of economic stability, with more solid fundaments for growth and fiscal equilibrium having been built over the last five years. "This should continue in coming years," says S&P.
According to Agência Brasil, the governor of the Central Bank of Brazil (BC), Henrique Meirelles, said that the S&P decision came at a meaningful moment. Especially, according to Meirelles, as it takes place at a moment of turmoil in the global economy.
This shows, according to Meirelles, the "greater resistance" of the Brazilian economy, recognized by the rating agency. According to him, "the performance of the economy, with regard to investment, employment and income, is a clear demonstration that 'investment grade' clearly reflects the decisive improvement in economic fundaments."
Meirelles was in São Paulo when he heard the news. Soon after that, an advisor in Brazilian capital Brasília organized a teleconference, in which he said that an important figure, presented by Standard & Poor's, was a forecasted matter. This, pointed out the BC governor, is the result of stability.
"Forecastability is fundamental to guarantee sustained growth for the country and is the result of persistence in the implementation of consistent economic policies," pointed out Meirelles.
Bzz/Anba
 |
Subscribe to this comment's feed
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.