Brazil’s Acting President Michel Temer is in damage-control mode as his administration faces its first political crisis with a corruption scandal that helped bring down his predecessor encroaching on his inner circle.
Top Temer ally and newly-appointed Budget Minister Romero Juca went before journalists on Monday to deny allegations made earlier in the day that he wanted to obstruct the sweeping corruption probe known as Carwash. Temer will wait to see how Juca’s explanation is received by the press and society before deciding whether to replace him, according to a presidential adviser who asked not to be identified.
Brazil’s real led losses among major currencies and the Sao Paulo stock exchange index fell amid investor concern that the scandal could derail Temer’s efforts to revive the economy. Analyst Lucas de Aragao said the allegations, which come less than two weeks after Temer took over the presidency, are particularly damaging because they’re centered on a pillar of his economic team who is tasked with containing a widening budget deficit that has eroded confidence in the country.