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Fitch warns political instability in Brazil could affect companies
Last Updated: 2018-06-08 06:13 | Xinhua
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The international credit rating agency, Fitch, warned on Thursday that corporate credit indicators are rising in Latin America except in Brazil, where continued political instability remains a problem.

In a new report, the director of Fitch Ratings in Brazil, Debora Jalles, said that this "political turbulence" is one of the main threats facing Brazilian corporations in 2018.

Fitch alerted to a plethora of vulnerabilities in Brazil, such as the country's unstable political atmosphere, the fluctuations in the value of the real, rising international oil prices, and the deceleration of its economic recovery, which could severely affect the cash flow rate of operations over the coming year.

Jalles wrote that Brazil's situation contrasts with that of Argentina where the corporate sector maintains "relatively manageable" capital structures, as well as having reduced liquid debt and an improvement in the liquidity of companies, positive signs at a time when the Argentinean peso is being devalued and the interest rate is rising.

Fitch also highlighted the strong status of Chilean companies, while in Colombia, companies postponed investments and expenditure in the first half of 2018 due to the presidential elections, with the second round set for June 17.

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