Halister News

(Bloomberg) -- Should it assume power as expected, the government of VP Michel Temer may fail to fix the economy in the short term, prompting BRL to retreat to weaker levels, Sidnei Nehme, director at Sao Paulo brokerage NGO Corretora says in a phone interview.

• Eco. reforms pledged by Temer, in case President Rousseff’s impeachment is approved, are unlikely to pass in Congress in the near term
• “It will be hard to build consensus among Congressmen. The economic adjustment may take all of Temer’s two years in government”
• BRL YTD gains aren’t compatible with economic reality of negative growth; weak currency needed to avoid further deterioration of trade balance, current account
• Carwash probe may continue as a risk to political scenario even after new president takes helm
  • External scenario also a risk for BRL in second half, especially given expected U.S. Fed rates hike