Brasília – The Brazilian minister of Finance, Guido Mantega, said this Wednesday (15th) that the risk of Brazil defaulting on its debts is lower than the United States’. “For the first time in history, Brazil’s insolvency risk is lower than that of the United States,” said Mantega, in an interview after having breakfast with president Dilma Rousseff and governors of states in the Northeast and North, at Palácio do Planalto, the presidential palace.
Mantega referred to the assessed risk in the credit default swap market, a sort of insurance used by investors against the risk of insolvency. “Whoever is fearful that there might be a default gets the insurance (CDS),” he said.
He highlighted that this type of operation currently concentrates over US$ 70 trillion. According to data disclosed by Mantega, presently, whenever you get insurance on the Brazilian debt, you pay less than on the United States debt.
The minister also stated that he is glad about the news, because it represents the solidity of the Brazilian economy and the confidence of investors in Brazil. “President Dilma was pleased with the fact that Brazil offers a lower risk than the US. This goes to show that we are running the correct economic policy,” he said.
*Translated by Gabriel Pomerancblum
