Fitch downgrades Brazil

Fitch Ratings said it downgraded Brazil’s long-term foreign- and local-currency issuer default ratings to BB from BB+.

The issue ratings on Brazil’s senior unsecured foreign- and local-currency bonds also are downgraded to BB from BB+.

The outlook remains negative.

The country ceiling also was downgraded to BB+ from BBB- and short-term foreign-currency issuer default rating was affirmed at B.

The downgrades reflects the country’s deeper-than-anticipated economic contraction, failure of the government to stabilize the outlook for public finances and the sustained legislative gridlock and elevated political uncertainty that are sapping domestic confidence and undermining governability, Fitch said.

The negative outlook considers the continued uncertainty surrounding the progress that can be made to improve the outlook for the country’s growth, its public finances and the government debt trajectory, the agency said.

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