This post is also available in: 
Français
The country’s stocks, bonds and currency tumbled on Thursday as a new political crisis threatens to
derail the government’s plans to take the country out of recession.
Brazil’s federal police carried out
arrests and searches after news reports indicated that President Michel Temer approved bribes to
silence a key figure in last year’s corruption scandals, which led to the impeachment and ousting of
former president Dilma Rousseff. Temer has denied the allegations.
The Ibovespa stock index came
to a halt after plunging 8.8% on Thursday, while the real posted its biggest loss since 1999, despite
the central bank’s intervention to support the currency.
The yield of US-dollar denominated sovereign
bonds surged by 56 basis points to 5.09%.
Although contagion to other Emerging Markets has been limited, the developments in Brazil warrant
the experience and expertise from active managers.
Add Comment