After initiating impeachment proceedings, Ibovespa rose 3.29%, dollar fell 2.26%

A day after Lower House Speaker Eduardo Cunha initiated impeachment proceedings against President Dilma Rousseff, São Paulo Stock Exchange index, Ibovespa, rose, while the US dollar's currency fell. In the afternoon, the Ibovespa reached up 4%, but stood at 3.29%. Dollar's currency stood at R$3.78, down 2.26%.

The reaction of the financial market surprised many analysts. For Professor Fabio Kanczuk, from the Economics Department, of University of São Paulo (USP in the original acronym), if the impeachment proceedings were approved and vice-President Michel Temer took office, he would have better political conditions to govern and encourage macroeconomic reforms.

On the other hand, the economist Luciano D'Agostini, a postdoctoral fellow in macroeconomics from the Federal University of Rio de Janeiro, considers to be "reckless" the possibility of such proceedings and says the consequences will "spill over the citizen." For the economist, due to uncertainties about the future, dollar volatility (strong oscillation) should increase, as well as the country risk (which measures the degree of a country's risk to foreign investors).

But the Congress' approval of 2015 fiscal target revision yesterday has also encouraged investors. The revision was a key part of the set of adjustment measures proposed by the government.

Translated by Amarílis Anchieta