Brazilian assets tumbled on Tuesday, leading losses across the globe, on reports the government will breach the country’s spending cap rule to finance a new social program, hurting the fiscal position of Latin America’s largest economy.
The new aid program to the poorest, dubbed Auxilio Brasil, will give handouts of as much as 400 reais ($72) per individual, according to people with knowledge of the matter. That amount is higher than the economic team had said was possible, which should mean about 30 billion reais of the new expenses will bypass Brazil’s spending cap rule this year, one of the people said, asking not to be named because discussions are private.
