The Brazilian currency Real lost 1% at the end of trading on Friday and begins this week at 3.42 Reais to the US dollar, the lowest in twelve years, because of the political and economic uncertainties surrounding Latin America's largest economy.
The Brazilian government registered a primary deficit of $470 million (1.6 billion Real) in the first half of 2015, according to figures from the National Treasury release on Thursday, O Globo newspaper reported. The deficit is the worst result since 1997. In the same period last year, the government recorded a surplus of $5 billion (17 billion real).
Brazil's central bank raised interest rates to 14.25% from 13.75% as expected on Wednesday, delivering another hefty increase to stifle inflationary risks from a sharp depreciation of the local currency. This is the highest rate since October 2006.
Brazil' minister of agriculture Katia Abreu said she was very optimistic about Mercosur reaching a trade agreement with the European Union, and if there are problems look to Europe, because Mercosur members have almost agreed and finished their proposal.
Brazilian police on Tuesday arrested two executives involved in building a nuclear power plant for Eletrobras, pulling the state-run utility into a corruption scandal that has engulfed government-owned oil company Petrobras.
Standard & Poor's on Tuesday said Brazil could lose its coveted investment-grade rating in the coming year if fallout from a number of corruption investigations further stymies economic growth and the implementation of austerity measures.
Analysts expect Brazil's economy to contract by 1.76% this year, marking its worst performance since 1990, with the inflation rate hitting 9.23%, the Central Bank said on Monday.
Banks in Brazil are now forecasting economic contraction in 2016 and if this proves correct it will be first time Latin America's largest economy shrinks two years running since the Great Depression.
Tens of thousands of workers at Brazil's state-owned Petrobras went on a nationwide 24-hour strike on Friday to protest the oil company's plans to sell 15.1 billion dollars worth of assets by the end of next year to help pay off a debt of about 120 billion dollars.
Brazilian prosecutors presented formal charges on Friday against the chief executive of Latin America's largest engineering firm and other senior executives detained last month in a landmark investigation meant to show that the country's elite are not above the law.