Brazilian Stocks Gain After Temer Scores First Congress Victory
- Legislators approve request to change 2016 budget target
- Ambev and Vale contribute most to gains in Ibovespa index
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Brazil’s stocks rose after the new government scored its first victory in Congress, fueling optimism that more measures aimed at shoring up finances and restoring growth will be approved. The real fell.
Lawmakers in a joint session of Congress supported legislation that allows the government to post a budget gap before interest payments of 170.5 billion reais ($47.5 billion) in 2016, rather than a primary surplus as proposed by the previous administration. Had lawmakers rejected the request, the administration would have been forced to drastically cut spending and shut down many government services in order to meet the original goal.