S&P and Fitch Ratings this year raised Brazil’s long-term foreign currency debt to BBB-, the lowest level of investment grade, after record commodity exports bolstered foreign reserves and growth in Latin America’s biggest economy. Colombia’s foreign credit rating was raised to within one level of investment grade by Moody’s Investors Service as the fastest economic expansion in three decades lures capital and narrows the budget deficit. The expansion has buoyed tax receipts, helping pare the government’s net debt to 28 percent of gross domestic product last year from 48 percent in 2002, the year Uribe took office. Colombia’s foreign debt fell to about 28 percent of total debt last year from 52 percent in 2002, according to the Finance Ministry. With inflation expected to remain outside of the central bank’s 3 percent to 6 percent target range for the next two years, interest rates will need to stay higher for longer, undermining growth, Fitch said. South Africa’s current account deficit swelled to 9 percent of gross domestic product in the first quarter, the widest in 26 years, while foreign investment in stocks and bonds plunged, undermining the rand. read more

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