BZF - Why Brazil Must Build A (Fiscal) Wall
First appeared at Americas Quarterly
Without reforms, financial markets’ optimism may crumble — and bring the house down.
Judging by the reaction of financial markets, the Brazilian economy started the year at high speed. The real is among the world’s best-performing currencies so far in 2019 and the main stock market index Ibovespa hit a string of record highs leading into last week, when it broke the 97,000-point mark. Future interest rates have fallen sharply.
Foreign investors are buying in as well. The premium demanded as compensation for the inherent risk of buying Brazilian bonds,