The resignation of Brazil's pro-austerity finance minister has left markets on edge as amid concerns over whether his replacement will continue with a program of fiscal consolidation.
On Friday, Brazilian President Dilma Rousseff replaced Finance Minister Joaquim Levy, a fiscal conservative appointed just over a year ago, with a close ally, Budget and Planning Minister Nelson Barbosa, the Brazilian leader's office said in a statement.
Levy's resignation was not a surprise to many analysts as his austerity plan had come under increasing criticism, but markets did not take kindly to the news of his replacement with stocks falling 3 percent and the Brazilian real declining 2.6 percent against the dollar.
While markets reacted badly to the news on concerns that Barbosa could pull the plug on his predecessor's austerity policies, he pledged to maintain fiscal stability, cut spending and said that in 2016, the government expected "to spend the same that we spent six years ago." He said that he remained confident that Brazil, a country hit by recession this year, would return to growth.