Political crisis in Brazil, which has been brewing for quite some time now is moving on to final stages now. Brazilian president, who has been elected last year it on its way to face impeachment, a formal process, in which an official is accused of unlawful activity.
People has been protesting, since last year, demanding step down by Ms. Dilma. President of the house, Eduardo Cunha has finally accepted the request for impeachment. The impeachment will be based on petition, accusing her of crimes of responsibility in handling of 2014 budget. She has allegedly used accounting tricks to plug gaps in state finances.
Ms. Dilma, however denied of any wrongdoing.
Brazil's economy is going through its darkest phase in at least in a quarter century. Economy has contracted -1.7%, after -0.8% and -2.1% in prior two quarters. Currency Real has depreciated more than 50% in last 12 months, which added further pressure to already indebted corporate sector. Corporate sector debt is now close to 95% of GDP. Due to higher inflation (9.93%), rate is at record high (14.25%). Consumption is still in declining phase.
To add to the misery of Ms. Dilma's government, her name got attached to Petrobras scandal, which increased calls in the street for her step down.
Though investors might see ousting of Ms. Dilma Rousseff as positive, ousting her would also mean political crisis in Brazil is here to stay for longer.
Brazilian Real is currently trading at 3.83 per Dollar, down -0.16% today.