Updated 07:10 PM EDT, Mon, Sep 20, 2021

Rousseff Impeachment Safe - For Now and Brazil's Economic Woes Continue

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There was a new development in Brazil's impeachment proceedings saga against Brazilian president Dilma Rousseff. As well, the country's debt rating took another blow, only to compound the problems facing the president.          

The embattled Rousseff staved off impeachment measures when the country's Supreme Court ruled that she cannot be impeached under existing procedures.

The top court decided that there must be a new vote where the Senate will make the final decision. A beleaguered Rousseff achieved a badly needed win on Thursday when the judges instructed Congress to begin new a new impeachment process against the besieged president.

The court annulled an impeachment commission which was set-up by secret ballot earlier in December in the lower house, that is controlled by the opposition, they ordered a new open vote to be cast and then that the Senate, have final say in the matter. Rousseff has more sympathizers in the Senate.

In a further blow to Rousseff and her administration, on Wednesday, Fitch - the credit agency, cut the country's sovereign debt rating to junk status. The agency alluded to the political and economic crisis that may threaten to oust the Brazilian leader. It was the second time a credit agency cut the country's debt to junk status.

"It is hard to be surprised by the Fitch downgrade. Political uncertainties prevent any clarity about the economic outlook," said Candido Bracher, chief executive of Itau BBA, the investment bank unit of Brazil's largest private bank, as was reported by Reuters.

According to data from Markit, a Financial Information Service, the Brazilian real, fell about 2 percent in Wednesday trading. And dollar-denominated bonds also fell sharply, and five-year credit default swaps rose 28 basis point to 482 bps.

Over the summer, Standard and Poor's cut Brazil's rating to junk and Moody's Investor Services has the world's seventh largest economy on review for a potential downgrade to this level.

Brazil's opposition is hoping that the economic crisis will get worse so as to strengthen their bid to oust Rousseff. All those involve do agree that it will take a massive showing of protest against the president to give the political will and capital to the opposition to remove her through impeachment proceedings through Congress.

There were dueling protests in Brazil this week, on Sunday some 40,000 people went to the streets of Sao Paolo and there was another protest in support of Rousseff on Wednesday which saw 50,000 people take to the streets of Rio de Janeiro, host of next year's Olympics.

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