Investors are worried about the crisis inflated by Jair Bolsonaro's confrontation with political institutions and the risk of fiscal loss. And now it's starting to affect the markets.
The Ibovespa reversed course and fell 3.3% in the week; future interest rates returned to the 2018 level; the dollar was R$ 5.42.
For former Central Bank director Alexandre Schwartsman, the market ignored domestic risks by riding the wave of global liquidity. Now, with the recovery of China and the USA less than expected, the external scenario is no longer providing relief, and local insecurity is exposed.
Sergio Vale, from MB Associados, said that there is no longer any expectation that the current management will deliver anything relevant. "With Bolsonaro creating crises, bringing rising fiscal risks and a lack of policy balance, the market will gradually abandon him."
Two points of frustration are the proposal to postpone the payment of court orders and the increase in expenses.
Economists point out that distrust is a picture of the moment. "the emperor has no clothes," says André Perfeito, from Necton, "but he can get dressed again."
Translated by Kiratiana Freelon