- Real fell in afternoon on speculation minister would quit
- Levy met with president and budget minister Thursday
President Dilma Rousseff’s leading adviser said Thursday that Finance Minister Joaquim Levy will remain in his job, easing speculation that Brazil’s top economist would resign after members of the government undermined his plan to shore up fiscal accounts.
“Levy is part of the team, he is helping a lot and he will continue to help Brazil,” Chief of Staff Aloizio Mercadante said after a meeting at the presidential palace with Rousseff, Levy and Budget Minister Nelson Barbosa.
Mercadante’s comments capped a day of volatility in the currency market as investors speculated Levy would resign. The real erased an earlier gain after the minister canceled his trip to a meeting of the Group of 20 nations. His press office said later on Thursday that the minister would fly to the gathering in Turkey after all.
The real ended the day up 0.6 percent to 3.7403 per U.S. dollar on bets Rousseff would keep Levy in office.
The president told reporters Wednesday that members of her administration have the "utmost respect" for the minister, denying he is isolated. Yet Levy, 54, has faced numerous obstacles since joining the government this year as members of the ruling Workers’ Party balked at some of his efforts to contain spending.
Budget Minister Barbosa played down reports of tension in the government in an interview that aired on GloboNews Thursday night. While it’s natural for there to be debate in an administration, the government’s budget plan reflects the work of the economic team as a whole, he said.
Levy and Barbosa on Monday presented a budget proposal to Congress that forecast Brazil will suffer the worst recession in a quarter century this year and will post a deficit before interest payments in 2016. The estimates renewed concerns that Brazil would lose its investment-grade credit rating.
Mercadante said Thursday’s meeting at the presidential palace covered strategies to reduce expenditures and boost fiscal revenue, adding that government officials are focused on closing the budget gap.