Financial market shows positive reaction to economic reforms in Brazil

The Brazilian financial market reacted very optimistically to the new government announcements of privatization and to a proposal for new interest rates for BNDES (National Development Bank). The currency value is on the rise and so is IBOVESPA, showing great recovery rates since its last downturn earlier in June, after corruption accusations were released in in mid May, involving President Temer.

The positive reaction seems to be a reflection to the privatization package announced, but also for the fact that the measure improves the country’s governance at a micro level as well, having a good effect on overall enterprise management practices, improvement in the business environment and povides a promise of greater productivity as a result.

The forecast is for a wave of foreign capital income, though investors might want to wait at first, since currency exchange rates show a tendency for improvement as well. Share price increases were shown in the energy, mining and financial sectors.