Market Plunges in Brazil, Dollar Surges Amidst Political Turmoil
By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The U.S. dollar surged by 7.9 percent against the Brazilian real, as the country’s main stock market plummeted 8.8 percent on Thursday with the aftermath of the secret recordings showing that President Michel Temer approved of pay-off to a convicted politician for his silence.
The U.S. dollar closed at R$3.38/US$1, registering on Thursday the highest daily increase in eighteen years, while the IBOVESPA Index at the São Paulo’s stock market registered its greatest daily loss since 2008.
The market opened down, and within a few minutes circuit breakers were used to halt trading as stock plunged even further. According to economic analysts the loss suffered on Thursday at the stock market annulled a large part of the market’s annual gains up to now.
As traders and exchange operators tried to reassess the volatile situation, Brazil’s Central Bank (CB) issued a statement to try to calm foreign and domestic investors by insisting that the political turbulence would not significantly affect the country’s economy.
“The Central Bank is monitoring the impact of the information recently released by the press and will act to maintain the full functionality of the markets. This monitoring and action focuses on the proper functioning of markets. There is no direct and mechanical relationship with monetary policy, which will remain focused on its traditional objectives,” read the statement issued by the Central Bank during the afternoon.
Despite the four interventions in the foreign exchange market, the CB was unable to keep the dollar from appreciating at record levels against the Brazilian currency.
After markets closed the Central Bank announced it would be conducting currency swap auctions Friday (May 19th), Monday (May 22nd) and Tuesday (May 23rd).
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
+0.90%
167,830.27
+0.90%
64,193.66
+0.41%
11,241.32
+0.49%
2,874,493
-0.59%
2,453.87
-0.30%
57,612.45
+1.33%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 167,830.27 | +0.90% | +21.85% | 166,334.86 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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