Brazilian president Jair Bolsonaro has caused great unrest in the financial markets in Brazil, by firing the CEO of state-owned oil company Petrobras. The news scared investors. They fear greater government interference in Brazilian business and restrictions on market freedom in the South American country.
Bolsonaro has appointed a former general as new director of Petrobras, out of dissatisfaction with the increase of fuel prices by the oil and gas group. Petrobras’s share plummeted 22 percent on the São Paulo Stock Exchange, also due to a series of bank write-downs. As a result of the exchange rate boom, Petrobras lost an amount of 71 billion real, or 11 billion euro, in market capitalization.
The shares of state-owned electricity company Eletrobras were also under pressure, due to concerns that Bolsonaro also wants to tackle the electricity sector. The Brazilian Bovespa hoofdindex ended Monday with a minus of 4.9 percent, the biggest decline since april last year. The value of Brazilian state loans also fell, as did the value of the country’s currency. Brazil is the largest economy in South America.