Galípolo’s reference to BC puts the dollar above R$5

The submission of the name of the Executive Secretary of the Ministry of Finance, Gabriele Gallipolo, for a vacant position in the Central Bank was greeted with suspicion by the financial market. The dollar was set to end the day up more than 1.20%, quoted at BRL 5.01. The movement made the real currency with the largest decline against the dollar among emerging markets on Monday. To get an idea of ​​how foreigners view Brazil today, the greenback was up 0.61% against the Argentine peso, which posted the second worst performance on the day.

In addition, Lula’s speeches against the privatization of Eletrobras also helped the country’s image to foreign investors to deteriorate. Shares of the electric company ended the day down by more than 1.70%, meaning the destruction of more than R$1 billion in market value in just one day.

Interest rate futures interacted with the Galípolo index with an increase in rates with longer maturities, indicating an increase in risk aversion in the long term. The Executive Secretary of Finance is worrying investors for being so close to economist Andrej Lara Resende (one of the fathers of Cruzados and Real Plans), who recently championed modern monetary theory (whose idea has sent Turkey’s inflation rates soaring to more than 70% per year).

However, the stock market closed up 0.85%, at 106,000 points, focusing on the rebound in commodity prices, led by Vale and Petrobras, as well as banks.