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Brazil loses investment-grade rating from S&P

A shopping district in the Centro neighborhood in Rio de Janeiro, Brazil.
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A shopping district in the Centro neighborhood in Rio de Janeiro, Brazil.

Standard & Poor's on Wednesday stripped Brazil of its investment-grade credit rating in a move that calls into question President Dilma Rousseff's efforts to regain market trust and pull Latin America's largest economy out of recession.

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The faster-than-anticipated downgrade, which will likely rock Brazilian financial markets on Thursday, is also a major setback for Finance Minister Joaquim Levy's measures to shore up public finances.

S&P cut Brazil's rating to BB-plus, which denotes substantial credit risk, from BBB-minus. The outlook on the new rating remains negative, which means additional downgrades are possible in the near term.