Investors assured as Palocci denies scandal involvement

| August 22, 2005 | 0 Comments
Brazil markets disappointed as politics scandal grows

In Brazil on Monday, both the equities markets and currency were up after Finance Minister Antonio Palocci held a press conference Sunday to deny that he has any involvement in the bribes-for-votes scandal currently rocking the country.

He said that he would not resign his post and that Brazil’s economy would survive the current political turmoil.

Analysts said that Mr. Palocci’s speech had been convincing and would go a long way to calming investor speculation over whether or not he would quit his job.

One analyst, however, said that investors would probably remain cautious with testimony scheduled for Wednesday from a former aide of Mr. Palocci’s who accuses the finance minister of taking bribes.

The Bovespa index in Sao Paulo gained 1.97 percent to 27,169, while the real gained 2 percent to rise to 2.402 to the US dollar.

The real had lost 2.8 percent on Friday, while the Bovespa had fallen by 2.75 percent on the accusations against Mr. Palocci, who allegedly took the bribes when he was mayor of Ribeirao Preto.

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