Generally pragmatic and predicable policy coupled with fairly transparent institutions have underpinned Brazil's macroeconomic stability. This has facilitated a sounder foundation for economic growth and fiscal improvement over the past five years that should continue over the next several years. The maintenance of a consistent macroeconomic approach (anchored by a floating-exchange-rate regime and inflation-targeting framework) following the political transition of 2002-2003 has been a key support for the ratings. The country's operationally independent central bank--an important institutional strength for the rating on Brazil--initiated a forward-looking monetary policy tightening cycle in April 2008. This contrasts with the absence of appropriate corrective policy measures and unchecked inflationary pressures in other, lower-rated sovereigns. Inflation has increased in Brazil, owing not only to global
