Political deadlock materialize investors fears for Brazil

Apr 24, 2020 15:58 7 min read (Updated: May 12, 2020 8:16)

As outgoing Justice Minister Sergio Moro leveled severe accusations of political interference in the country’s Federal Police, he wasn’t only compromising President Jair Bolsonaro — but also materializing Brazilian investors’ worst-case scenario: an institutional crisis that may paralyze the country during a recession brought about by the worst pandemic in a century.

The market’s reactions to Mr. Moro’s accusations were immediate and severe. Soon after the end of his press briefing, Brazil’s benchmark stocks index, Ibovespa, crashed by 9.5 percent — hovering just above circuit-break levels. The Brazilian Real plummeted to new record nominal lows, bringing the foreign...

Political deadlock shows Brazilian markets could get even worse

The political deadlock created by President Jair Bolsonaro could materialize Brazilian investors' worst-case scenario

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