By Jeffrey T. Lewis
SAO PAULO--The Brazilian real strengthened Tuesday after S&P
affirmed the country's investment-grade credit rating, and
Brazilian shares fell.
The Ibovespa stocks index fell 0.8% to 51506 points, led by
airline Gol. The real exited active trading at 3.1253 to the
dollar, according to Tullett Prebon via FactSet, after closing at
3.1601 on Monday. Tuesday=92s was the strongest close for the real
in almost two weeks.
Standard & Poor's Ratings Services said Monday after the
close of active trading that it maintained its ratings for Brazil's
credit with a stable outlook.
The ratings company praised President Dilma Rousseff's plans to
improve her government's fiscal situation and to restore lost
credibility, and said it expects that the president and Brazil's
Congress will continue to support the "politically challenging
policy correction underway."
The real was also helped by comments Tuesday from the president
of Brazil's central bank, Alexandre Tombini, who said the bank sees
no reason to stop its program of regular auctions of currency-swap
contracts.
The contracts provide companies with a way to protect themselves
from swings in the currency. The bank started the auction program
in 2013 and has extended it repeatedly, most recently through March
31. Mr. Tombini didn't provide any details on another extension to
the program.
In Brazil's stock market, Gol Linhas Aereas Inteligentes
(GOLL4.BR, GOL) had the biggest decline in the Ibovespa index, with
a drop of 4.3% to 8.85 reais. Iron-mining giant Vale (VALE,
VALE3.BR)retreated 3.9% to 19.58 reais, the second-biggest decline
in the index.
Real-estate developer PDG Realty (PDGR3.BR) had the biggest
gain, with rise of 4.3% to 0.49 real.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com