The ratings on the Federative Republic of Brazil are supported by: A consistent macroeconomic policy framework with a floating exchange-rate regime; Maturing fiscal institutions and fiscal policy track record; and Locally issued government debt that is less vulnerable to exchange-rate fluctuations. The ratings are constrained by: A large net general government debt burden, vulnerable to interest-rate movements; Structural economic and institutional impediments that limit investment and growth; and A somewhat vulnerable external position given an export base of only 18% of GDP. The ratings on Brazil reflect a consistent macroeconomic framework that includes a floating exchange-rate regime as well as inflation and fiscal consolidation strategies. This policy framework has bolstered the sovereign's economic performance. The central bank's monetary tightening cycle
