Reported 11 days ago
As Brazil faces a severe currency crisis, President Luiz Inacio Lula da Silva's economic aides feel powerless to halt the panic that has led to record capital outflows. The government has spent $8 billion to stabilize the real, the worst-performing major currency this year, yet investors continue to withdraw funds amidst concerns about fiscal credibility. Lula's reluctance to implement deeper austerity measures, coupled with ongoing intervention by the central bank, raises fears of fiscal dominance that could undermine monetary policy effectiveness.
Source: YAHOO