Brazil Markets Fall on Report of Ex-President Temer's Arrest Michel Temer became the second former Brazilian president to be arrested as part of a sweeping corruption probe that has brought down top business executives and politicians and continues to stir political uncertainty. Brazilian markets slumped. One of Temer’s former ministers and closest aides, Wellington Moreira Franco, was also detained, according to GloboNews. The reason for the arrests, part of the so-called Carwash probe, wasn’t disclosed yet and Temer’s lawyers didn’t immediately respond to a request for comment. Moreira Franco’s press office didn’t comment when contacted by Bloomberg News. The move represents the latest development in the country’s massive Carwash corruption investigation which is now in its fifth year. What started as probe into kickbacks involving state-controlled oil company Petroleo Brasileiro SA, known as Petrobras, later expanded and toppled chief executives of major construction firms. It also led to a jail sentence for another former head of state, Luiz Inacio Lula da Silva. Brazilian markets slumped on the news, with the benchmark Ibovespa stock index falling as much as 2.1 percent. The real was the worst performer among major currencies, down 1.1 percent in early afternoon trading. "It’s a reminder of the political noise that is in the system, which could be a source of currency volatility," said Danny Fang, a currency strategist at Banco Bilbao Vizcaya Argentaria SA in New York. Rafael Cortez, a political analyst at Tendencias Consultoria, said the arrests will reduce room for negotiations of pension reform in Congress. "The episode reinforces a negative bias of the political scenario and generates instability," he said . Temer’s MDB party lamented the decision in a statement, saying there’s no sign that neither Temer nor Franco committed any wrongdoing. The former president was charged with corruption and money laundering in December, along with five others. Temer denied any wrongdoing in the case. He is also being investigated for allegedly receiving bribes from JBS owner Joesley Batista. A lifelong politician, Temer assumed the presidency in 2016 after the impeachment of his predecessor, Dilma Rousseff. During his administration, the government passed several market-friendly measures including a bill that limits public spending increases. Source: https://www.bloomberg.com/news/articles/2019-03-21/brazil-ex-president-temer-arrested-in-corruption-probe-g1-says?srnd=markets-vp