September 10, 2015 / 7:41 PM / 4 years ago

UPDATE 1-Fitch still sees support for Brazil's investment grade

(Adds quotes from Fitch analyst, background)

NEW YORK, Sept 10 (Reuters) - Fitch Ratings still sees elements supporting Brazil’s investment grade, a senior analyst with the ratings firm said on Thursday, easing market fears the agency could follow Standard & Poor’s decision to cut the country to junk.

Speaking at a Fitch conference in New York, analyst Shelly Shetty said that Brazil’s credit rating is deteriorating and that there is a greater than 50 percent chance it will be downgraded.

But a one-notch downgrade would still leave Brazil with investment grade, because Fitch currently has the country at BBB, or two notches above junk level, with a negative outlook.

“There are clearly elements which still buttress the investment-grade credentials,” Shetty told investors, citing Brazil’s economic diversity, per capita income levels, and the government’s net creditor position in dollars.

“That said, clearly the direction (of the rating) is negative and that is reflected in our outlook,” she said.

Brazil’s rating trajectory will greatly depend on political consensus about sound fiscal and macroeconomic policies, Shetty added. “This is a judgment one will have to form, whether or not this sort of consensus is going to remain in Brazil.” (Reporting by Tariro Mzezewa; Writing by Walter Brandimarte; Editing by Lisa Shumaker)

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