Photo: Poder360
the elected president Luiz Inacio Lula da Silva (EN) criticized the volatility of the Brazilian financial market, after speaking during a visit to the Centro Cultural Banco do Brasil (CCBB), in Brasília, where the government transition works are taking place, this Thursday, 10th.
“The market gets nervous for nothing. I’ve never seen a market as sensitive as ours. It’s funny that the market wasn’t nervous after Bolsonaro’s four years,” he told reporters after the event.
The financial market spent the day unstable. Earlier, the president-elect criticized “fiscal stability”, arguing that it is necessary to put the social issue ahead of issues that, according to him, are of interest only to the financial market. The PT also questioned why having an inflation target and not having a target for GDP growth.
as showed the Estadão, the option to permanently remove Auxílio Brasil expenses from the ceiling gained strength in the transition team, which displeased the market. For the financial sector, the exit that is being negotiated by the transition team, which would also have to be done via the Proposed Amendment to the Constitution (PEC), could deteriorate the trajectory of public debt sustainability.
Dollar soars, and the stock market drops
Investors reacted automatically to Thursday’s speech. After Lula’s speech, the Ibovespa closed the day with a drop of more than 3.7%at 109,350 points, a level that had not been reached since September 30, before the first round of the presidential elections.
The dollar, on the other hand, rose 4.08% and was quoted at R$5.40 on the spot market. Among state-owned companies traded on the Brazilian stock exchange, Petrobras shares dropped 1.4% (PETR3) and 3.5% (PETR4). Banco do Brasil’s (BBAS3), which opened the session on a high, lost 2.24%.
The president-elect recalled that, during his two terms, between 2003 and 2010, Brazil respected fiscal targets, inflation rates and left the country with a surplus, instead of debt with the International Monetary Fund (IMF). Lula reaffirmed, as he did in the electoral campaign, that the country must regain credibility, stability and predictability. “Society cannot be taken by surprise,” said the PT.
Mantega in the transition team
The market also did not react well to the announcement made this Thursday by the vice-president-elect and coordinator of the government transition, Geraldo Alckmin, about the presence of former Minister of Finance Guido Mantega in the Planning, Budget and Management group in the government transition. .
Mantega headed the finance ministry during previous PT administrations and is not credible in the eyes of a large part of the financial markets, especially after his role in the administration of former president Dilma Roussef.
Alongside Mantega in this thematic group, there will also be federal deputy Enio Verri (PT-PR), economist and professor at the Federal University of Rio de Janeiro (UFRJ) Esther Duek and the president of the Federal Council of Economics, Antonio Corrêa de Lacerda. .
* With information from Estadão Content and Reuters
