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THE PRESIDENT of Brazil, Jair Bolsonaro, likes to call his University of Chicago-educated economy minister, Paulo Guedes, his “Posto Ipiranga”, a chain of full-service petrol stations. The nickname charmed markets during the election campaign in 2018, but Mr Guedes’s reform agenda has lost ground to populist moves aimed at winning re-election. When on February 19th Mr Bolsonaro fired Roberto Castello Branco, the boss of Petrobras, to appease lorry drivers upset about rising fuel prices, markets saw it as a sign of more meddling to come. The state-run oil firm’s share price dropped by 21%, wiping 100bn reais ($18bn) off its market value. Brazil’s benchmark stock index fell by 5% and the real lost 2.4% against the dollar(all have since recovered some of the losses).
What is unusual is not that Mr Bolsonaro intervened, but how he did so. With the oil price rising,…
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