Investors on Edge: Brazil to Scale Back Austerity?

Holly Ellyat – CNBC, 12/21/2015

The resignation of Brazil’s pro-austerity finance minister has left markets on edge as amid concerns over whether his replacement will continue with a program of fiscal consolidation.

On Friday, Brazilian President Dilma Rousseff replaced Finance Minister Joaquim Levy, a fiscal conservative appointed just over a year ago, with a close ally, Budget and Planning Minister Nelson Barbosa, the Brazilian leader’s office said in a statement.

Levy’s resignation was not a surprise to many analysts as his austerity plan had come under increasing criticism, but markets did not take kindly to the news of his replacement with stocks falling 3 percent and the Brazilian real declining 2.6 percent against the dollar.

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