(Adds details from central bank statement, background)
RIO DE JANEIRO, March 25 Brazil's central bank
on Tuesday indicated it will make no major changes in
macroeconomic policy after Standard & Poor's cut the country's
credit rating closer to speculative grade.
The bank said in a statement it will keep responding to
challenges "in a traditional way." That includes making use of a
rigorous set of macroeconomic policies and a flexible exchange
rate regime, as well as liquidity buffers "to smooth out moves
in asset prices."
The central bank has repeatedly said it could use the
country's $376 billion worth of foreign reserves to intervene in
the foreign exchange market, if needed, to prevent sharp
So far, however, the bank has been successful in curbing
market volatility by selling currency swaps, derivatives that
provide investors with protection against currency losses and
that do not require policymakers to use dollars from the
S&P late on Monday cut Brazil's credit rating to BBB minus,
its lowest investment-grade level, citing a deterioration in the
country's fiscal performance and prospects of subdued economic
growth in the coming years.
(Reporting by Walter Brandimarte; Editing by Chizu Nomiyama and