Moody’s raises credit rating, and Brazil is one step closer to investment grade

The risk rating agency Moody’s Ratings raised Brazil’s credit rating from ‘Ba2’ to ‘Ba1’ this Tuesday (1st) and maintained the country’s outlook at “positive”. The credit ratings of government debt securities were unchanged since 2016. Brazil is still at the speculative level and at a so-called investment grade level. This is where the country becomes safe – that is, with low risks of default for those who invest in its debt securities. According to Moody’s, growth in the coming years will remain broad, with domestic demand driven by a relatively strong labor market .Moody’s is one of the three largest risk rating agencies in the world, and its credit ratings consist of assessments of the probability that a bond issuer will honor its financial obligations.International investors pay attention to the ratings given by these agencies when it comes to choose where to invest your resources. If the investor believes that, even with a lower rating, it is worth betting on the country’s bonds, he then charges a higher premium, appropriate to the risk offered by the issuer. It is worth noting that these ratings are not absolute measures, but just a tool used in the decision-making process.