For Brazil and Venezuela, foreign currency bonds were downgraded to B2 from B1 by Moody's Investor Service.

Brazil's and Venezuela's foreign currency bank deposits, and thus local-currency-denominated government bonds, were downgraded to CAA1.

For Mexico, Moody's put BA2 notes on credit-watch, with likely downgrading forecast.

For Argentina, Moody's put BA3 notes on credit-watch, with likely downgrading forecast.

Moody's attributed its ratings changes to the view that prospects had worsened for fiscal adjustment programmes in the large Latin American economies, due to tightened foreign capital availability.

As foreign capital becomes scarcer and more expensive, Moody's said Brazil will be more vulnerable to sudden changes in investor confidence while Venezuela will be vulnerable to swings to oil prices.

As forMexico and Argentina, though their financial systems have grown stronger since 1995, they may suffer from a potential regional crisis as a result of current turmoil in world financial markets, Moody's said.