HALISTER1: Brazil Fiscal Deterioration May Crack Relative Stability: Garde

Brazil Fiscal Deterioration May Crack Relative Stability: Garde

(Bloomberg) -- After relative stability of BRL since last September’s rout, fiscal deterioration is potential trigger for future negative market reactions, Daniel Weeks, chief economist at Garde Asset Mgmt says in phone interview.
  • Weeks sees BRL at 4.20 per USD at yr-end, with bigger risk for USD to close above the estimate
  • Latest developments in fiscal policy, BCB refraining to hike and govt attempts to expand credit resembles the policies of Pres. Rousseff’s first mandate
  • Brazil economy is unbalanced; “the sustainability of the debt may start being discussed” should govt fail to approve reforms
    • Minister Rossetto’s remarks during recent interview suggest govt is not very interested in approving reforms: Weeks
  • NOTE: Brazil hasn’t yet set new minimum retirement age, the minister told Valor
  • NOTE: Govt proposal would allow greater fiscal deficit: Folha
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Daniel Weeks (Garde Asset Mgmt)
Miguel Rossetto (Federative Republic of Brazil)

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