Bolsonaro Administration Postpones Announcement of Social Aid Plan after Pressure from Guedes and Market Reaction

Economy secretaries threaten to leave after Bolsonaro imposes R$400 aid; stock market drops, and dollar goes to R$ 5.60

The Bolsonaro administration had planned to hold a ceremony this Tuesday to announce that Auxílio Brasil, a social program that will replace Bolsa Família, would pay an average of R$400 per family, higher than previously expected. The retreat came after nervousness in the market over the possibility of the government increasing spending above the ceiling and pressure from minister Paulo Guedes (Economy) and his team, including the threat of dismissals of secretaries in the ministry. The Ministry of Economy denies risk of stampede.

Faced with the impasse, the economic team resumed its intention of trying to keep the new program within the spending ceiling. The amount of R$ 400, however, was determined by the president and is not under discussion. For the political wing of the government, there is unlikely to be a way out inside the budget ceiling.

According to reports, displeasing the financial market was already “priced” by the president's assistants. The attrition between the government's political and economic wings has intensified in recent days because of emergency aid. The Brazilian Stock Exchange registered a sharp drop and the dollar soared on Tuesday.​

Translated by Kiratiana Freelon

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