Moody's upgrades Brazil

Moody's Investors Service said it upgraded the government bond ratings of Brazil to Baa2 from Baa3 due to a sovereign credit profile consistent with ratings in the higher Baa range, recent policy adjustments that should result in a more sustainable macroeconomic scenario and prospects for improving medium-term fiscal and growth indicators.

The outlook remains positive.

The upgrade reflects Brazil's credit fundamentals, which are consistent with ratings placed in the middle- to upper-range of the Baa rating category and moderate susceptibility to financial event risk, Moody's said.

The upgrade also considers the government's willingness to reverse expansionary policies and adopt a conservative policy stance that appears more consistent with a sustainable growth path, the agency said.

These attributes are counterbalanced by recent evidence of rapid credit growth, increased inflationary pressures and signs of overheating, Moody's added.

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