Brazil is hit by a new political crisis
Juan Carlos Rodado, Research Analyst at Natixis explains that less than one year of President Dilma Rousseff’s outset, Brazil is hit by a new political crisis as all eyes are pointed to a release of a tape that would involve President Temer discussing with JBS CEO on bribe payments to buy the silence of former lower House speaker Eduardo Cunha.
“The main point is without doubt the content of the tape. If it is really incriminating, President Temer would have to resign. If the bribe is less clear, a slower process will take place.”
“In short, the content of the tape will clarify the political crisis. If true, what is next is chaotic on the political front. The political crisis undermines the monetary easing cycle on the back of BRL volatility. We believe it is time to be defensive on Brazilians assets as these events bring forward 2018’s political uncertainty in an abrupt way.”