The dollar closed this Thursday (16) above R$4, its highest level since October 1 when the presidential elections consumed the attention of investors.
When Jair Bolsonaro became president, seemingly ushering in a more liberal approach to the economy, the market was optimistic. However, this optimism has evaporated as Bolsonaro has accrued enemies, distracting himself from the political-economic reform agenda that is considered crucial for the country’s recuperation.
The American currency closed at R$ 4.038 to $1, an increase of 1%.
The stock market--Ibovespa--is also showing skepticism. It closed down 1.74% at 90,024 points, the lowest level in a year. Vale caused this fall on Thursday. The company lost more than 3% in value because it recently announced that there is a risk that a dam will rupture.
This year, the Brazilian stock market has grown 2.43%, an increase that is less than what the stock market gained on January 2, Bolsonaro’s first day as president after his inauguration.
This modest appreciation contrasts with the euphoria that pushed the Ibovespa close to 100 thousand points in March. Since then the stock market has fallen almost 10%.
“I would like to say that this fall is temporary. But I am transforming myself from an observer into a fan. Right now, we are experiencing the bitter taste of reality versus our expectations,” said George Wachsmann, director of Vitreo, a company that helps people manage the stock market using digital technology.
The recent lousy mood of investors has been aggravated by Bolsonaro and his penchant for conflict. Education budget cuts helped to bring out thousands of people to the streets for a protest on Wednesday (15), and Bolsonaro was relentless in his criticisms of the protesters.
Translated by Kiratiana Freelon