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Thursday 21 April 2016

Brazil Faces...



Support for Brazil’s government is flagging amid political and economic crises

As emerging market currency kerfuffles go, Brazil’s "Caipirinha Crisis" , where the real fell to a 20-year low, certainly sounded sweeter than Mexico’s 1994 “Tequila Crisis”, even if the reality for investors was distinctly bitter. In September last year, the real fell to the lowest level against the dollar since it was created in 1994 and rating agencies cut Brazil’s government debt to junk status.



It is not hard to see why many believed the country was heading for its worst crisis in more than a decade. In 2015, a mounting political corruption scandal, combined with tumbling commodities prices, concerns about government spending and an economic slowdown made Brazil the worst-performing local-currency debt market of the year, according to JPMorgan.


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