The Sao Paulo stock exchange suspended trading for the third time this week Thursday as shares plunged more than 11 percent, the latest havoc from the coronavirus pandemic to hit the Brazilian economy.
The real currency also plummeted to below five to the dollar for the first time ever, underlining the heavy toll the pandemic is taking on Latin America’s largest economy, as traders reeled at US President Donald Trump’s shock ban on travel from mainland Europe.
The latest bad news could be particularly damaging for President Jair Bolsonaro, a Trump admirer, and his Economy Minister Paulo Guedes, who had said a week ago the real would only fall below five to the dollar “if we really mess up.”
“It’s a floating exchange rate. If we really mess up, it could go to that level,” said Guedes, the far-right president’s free-market guru, seeking to calm fears over the impact of the virus.
The Sao Paulo stock exchange’s Ibovespa index plunged 11.65 percent shortly after opening, triggering automatic circuit breakers that suspend trading for 30 minutes in case of a drop of more than 10 percent.
Sharp losses on Monday and Wednesday had also triggered trading halts.
Oil and airline stocks were again hit especially hard.
State-run oil company Petrobras lost nearly 18 percent, and airlines Gol and Azul were down more than 18 percent and 33 percent, respectively.
Overall, the Ibovespa has plummeted by more than 23 percent this week.
Brazil has confirmed 52 coronavirus cases, with no deaths so far.
But the pandemic has hit the economy hard, largely because of the country’s close ties with China, its biggest trading partner and top destination for its key commodity exports.
The government cut its 2020 economic growth forecast Wednesday by 0.3 percentage points, to 2.1 percent, and warned the fallout of the virus could end up shaving off even more.