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Brazilian Markets Tumble as Bolsonaro Revives Social Program

Central bank steps in to prop up real after new plan unveiled
Investors and experts question financing sources for program

Jair Bolsonaro — Jair Bolsonaro
Photographer: Andre Borges/Bloomberg

By

Simone Preissler Iglesias,

Samy Adghirni, and

Martha Viotti Beck

September 28, 2020, 6:54 PM UTCUpdated onSeptember 28, 2020, 9:29 PM UTC

Brazilian markets sank, forcing the central bank to step in to prop up the real, after President Jair Bolsonaro revived plans to launch a social program that investors fear could jeopardize a key austerity rule.

The Brazilian real lost as much as 2% on Monday after the government suggested that money for the program -- rebranded Citizen Income -- would come from limiting payments mandated by court decisions and redirecting resources from an educational fund known as Fundeb.