Reserve Buildup Improves Rating

July 2007 | Risk Summary

Brazil's international reserves buildup is having a positive effect on the country's economic risk ratings. As mentioned above in the Data Release section, we have revised up our year-end foreign reserves forecast from US$150bn to US$180bn. Consequently, Brazil's score in the 'external' category in the short-term economic ratings - which includes such factors as import cover and current account as a percentage of GDP - has jumped from 83.3 to 93.3 this month, moving the overall short-term score from 72.9 to 75.4. Likewise, the long-term risk rating has been bumped up slightly, from 66.9 to 67.4. Importantly, we believe that

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