[Updates to include comments by President Dilma Rousseff on 9th paragraph.]

In Brazil, where policymakers have been quite vocal against US monetary and economic policies recently -- not a single official peep was heard over the weekend in response to the downgrade of US debt, and its potential impact on the country's capital markets.

Mind you, Brazil is the fourth-largest single holder of US Treasuries -- behind China, Japan, the UK -- with about $211.4bn worth of the securities, according to the latest TIC data by the US Treasury (click on the picture for a larger image):


Treasury TIC data (July 18, 2011)

To be fair, Finance Minister Guido Mantega told journalists (pre-downgrade) -- as he met with other Latin American finance ministers in Lima -- that Brazil has never been "better prepared" to handle another global economic crisis.

"We have now larger foreign reserves and several defense mechanisms created during the 2008 crisis, which can be implemented at any time," Mantega said.

He has a point. As of June, Brazil held $327bn in foreign exchange reserves, according to a report by the International Monetary Fund. More recent local figures place total reserves at $348bn at the start of August, a 35 per cent increase from the same period a year ago.

That is more than the combined amount of forex reserves held by all of Latin America. Of the BRIC countries, Russia holds $524bn, India has $311bn and estimates place Chinese foreign reserves in excess of $3 trillion.

Here's a more detailed snapshot of Brazil's total reserve assets:

Brazil's official reserves assets (IMF)

Source: IMF

But despite the silence from Brazilian government officials, the country is not likely to start dumping those $211bn in Treasuries in a rush. First, the country is not mandated to do it in response to the downgrade. And second, because it has already started to do it: dollar-denominated assets held by the central bank's reserves pool fell to about 81 per cent from 90 per cent in 2007. (The latest Central Bank report of reserves' management can be found here.)

In the meantime, what is being "dumped" is the Brazilian stock market. The benchmark Ibovespa index fell again on Monday by 3.8 per cent, to trade at 50,943 points. Having dropped by 30 per cent this year, the index is now the worst performer among major stock indexes in 2011.

[After FT Tilt published this commentary, Brazil's President Dilma Rousseff spoke at an event in Brasilia. She called S&P's decision to downgrade US sovereign debt premature.

"We don't share their premature evaluation and I would say, incorrect, ratings' downgrade of the United States," Rousseff said. The president repeated the comments by Minister Guido Mantega last week that Brazil is in a stronger position now to absorb the impact of global markets' volatility. ]

The Monday Morning Take is a weekly column. FT Tilt's LatAm bureau chief Vivianne Rodrigues and correspondent Alexander Kliment offer an on-the-ground take on the people, events, companies and markets that matter in Latin America. See all our Monday Morning Takes via this link - you can also subscribe by email.

See also:
US debt woes - FT Tilt
Currency wars - FT Tilt
Global market rout - the bigest loser? Brazil's Ibovespa - FT Tilt
Global market rout - Ibovespa's R$100bn wipe out - FT Tilt