On Nov. 22, 2006, Standard&Poor's Ratings Services revised its outlook on its long-term ratings on the Federative Republic of Brazil to positive from stable. Standard&Poor's also affirmed its 'BB' long-term foreign, 'BB+' long-term local, and 'B' short-term currency sovereign credit ratings on Brazil, and revised its outlook on its 'brAA+' national scale credit rating on Brazil to positive. The positive outlook reflects continued decline in Brazil's fiscal and external vulnerabilities through another electoral cycle and signals that President Luiz Inácio Lula da Silva aims to progressively reduce fiscal inflexibility during his second term. Given the continuing, exceptional balance of payments performance, Brazil's external indebtedness, net of liquid assets, is projected at 51% of current account receipts
