The Rising Influence of Rising Affluence

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The value in local currency versus their dollar denominated debt will be crushing for many foreign companies.

The company’s strategy of loading up on dollar-denominated debt has backfired as both the local currency and the price of oil have plunged over the past year.

Last week, Petrobras reported that its total debt at the end of the third quarter was up 44% from the end of 2014 in local-currency terms to 506.58 billion Brazilian reais. That is roughly equivalent to 18% of Brazil’s gross domestic product in the first half of this year.