Brazilian President Jair Bolsonaro has caused significant turmoil in Brazil’s financial markets by firing the top executive of state oil company Petrobras. The news scared investors.
They fear more significant government interference in Brazilian business and restriction of market freedom in the South American country.
Bolsonaro has appointed a former general as the new director of Petrobras, out of dissatisfaction with the oil and gas group’s increase in fuel prices. Petrobras’ stock plummeted by 22 percent on the São Paulo stock exchange due to a series of downgrades by banks.
Due to the price boom, an amount of 71 billion real, or 11 billion euros, in the market value of Petrobras was lost.
Shares of state electricity company Eletrobras were also under pressure due to concerns that Bolsonaro wants to tackle the power sector. Brazil’s Bovespa main index ended Monday with a minus of 4.9 percent, the largest drop since April last year.
The value of Brazilian government bonds also fell, as did that of the country’s currency. Brazil is the largest economy in South America.