Thursday, June 16, 2011

Risk of Investing in Brazil Is Lower Than In The U.S. For First Time In History

Guido Mantega, Brazil's finance minister said that for the first time in history Brazil's risk is lower than the U.S.. In an interview at the Planalto Palace, Mantega said the report shows "the strength of the Brazilian economy and the confidence we have in the market."

The minister explained that the 'Brazil risk', as measured by credit default swap (CDS, its acronym in English) is a classification of sovereign bonds in foreign markets. Whoever is afraid of a payment failure, takes on insurance," he explained. He added that the government is "very happy " with this classification on the cost to ensure protection against a possible Brazilian debt default.

According to Mantega, president Rousseff was "very satisfied " with the fact that Brazil had a lower risk than the U.S.. "It shows that we are on track, that economic policy is correct, Brazil has been consolidating and we have earned respect from the rest of the world,".

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