Brazil / by Lewis McKinnon

Leading political figure Eduardo Cunha, the speaker of the lower house of Congress, broke off his coalition with president Dilma Rousseff’s Workers’ Party after allegations of bribery, which Cunha claims to be a political orchestration. Former president Luiz Inácio Lula da Silva is investigated by Brazilian authorities over corruption allegations with regards to his involvement in construction company Odebrecht SA. In the corruption scandal involving state oil company Petróleo Brasileiro SA, a former top executive of the company was arrested over corruption claims; corruption and money laundering charges were filed against the chief executive of Odebrecht; police raided politicians such as former president Fernando Collor de Mello’s residents; and the chief executive of a nuclear power company, subsidiary of state-controlled Centrais Electricas Brasileiras SA was arrested. A temporary measure allowing companies to reduce working hours and salaries of employees was introduced. Brazilian antitrust agency Cade started an investigation into currency manipulation, involving fifteen foreign banks such as Morgan Stanley and Citigroup Inc. Brazil’s investment grade and foreign currency rating was announced by rating agency Standard & Poor’s to be at risk of falling. The Brazilian real closed at its weakest level in twelve years against the American dollar on 24 July. Key fiscal targets for the two coming years are to be cut, announced Brazilian finance minister Joaquim Levy.