Brazil’s Sovereign Risk Is below U.S. Indices

Today, Finance Minister Guido Mantega celebrated the fall of Brazil’s sovereign risk below U.S rates. In his comment, he even “makes fun” of the North American country.

“I cannot resist making the comment that, for the first time in history, Brazil’s default risk is lower than the U.S.,” he said, adding that President Rousseff “was very pleased with the question of Brazil’s default risk being lower than the U.S.”*

According to Mantega, the fact that Brazil’s Credit Default Swap, or CDS, (an instrument of protection against the risk of a borrower failing to perform its obligations) has been trading below the U.S. “shows the soundness of Brazil’s economy and the confidence that markets have in us.”

Although circumstantial, the index shows that in practice investors see more risk of default from the United States than from Brazil.

IMF

Mantega, who gave an interview at the Presidential Palace to talk about the breakfast of governors from the North and Northeast with the president, has spoken about the race to head the IMF.

According to him, Brazil would not take a position after the two finalists — French Finance Minister Christine Lagarde and Central Bank President Agustin Carstens of Mexico — passed through the hearings with the direction of the IMF.

He returned, however, to strengthen Brazil’s position that developing countries need to have more voice in the organization.

*Editor’s Note: This quote, accurately translated, could not be verified.