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Stock market closes at lowest level since July after government criticism of BC

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Stock market falls 1.67% and reaches lowest level since August

The government’s criticism of the Central Bank (BC) made the financial market have a nervous day. The stock market fell more than 2% and closed at the lowest level since July. The dollar even started the day low, but reversed the movement and approached R$ 5.30.

The B3 Ibovespa index ended this Thursday (23) at 97,926 points, down 2.29%. The indicator even rose at the beginning of negotiations, but started to fall even during the morning and intensified the fall during the afternoon, after President Luiz Inácio Lula da Silva said that the Selic rate (basic interest of the economy) at 13.75% year “has no explanation” and that the Senate “will have to take care” of Campos Neto, president of the Central Bank.

This was the first time in nine months that the Ibovespa closed below 100,000 points. The indicator is at the lowest level since July 18 last year. The Brazilian stock market clashed with the foreign market. This Thursday, US stock markets rose after US Treasury Secretary Janet Yellen promised measures to guarantee deposits in US citizens’ banks.

In the foreign exchange market, the day was also marked by tension. The commercial dollar closed the day Thursday sold at R$5.29, up R$0.053 (+1.01%). The quotation started the day in a fall, with the US currency sold at R$ 5.20, but started to shoot up even during the morning. The US currency is at its highest value since the last 15th, when it closed at R$ 5.294.

On Wednesday (22nd) night, after the Monetary Policy Committee (Copom) maintained the Selic rate at 13.75% per annum, several authorities spoke out. The Minister of Finance, Fernando Haddad, considered “very worrying” the Copom communiqué, in which the Central Bank expressed uncertainty regarding the new fiscal framework and informed that it may raise the Selic again if inflation remains resistant.

The president of the PT, Gleisi Hoffmann, and the Minister of the Civil House, Rui Costa, also criticized the BC’s decision. In an interview with Brazil Agency this Wednesday, Costa ranked “insensitivity to the people” maintaining the Selic rate at the highest level since January 2017.

From now on, the Brazil Agency will only provide material on financial market closures on extraordinary days. The dollar quote and the stock exchange level will no longer be reported every day.

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