Rousseff Impeachment Vote Surprisingly Annulled

Last Friday, Brazilian President Dilma Rousseff’s impeachment looked like a sure thing after a Senate committee recommended a trial for the infringement of budget laws. This left the head state one step away from being suspended and replaced by Vice President Michel Temer.

Related Link: Brazilian President Dilma Rousseff One Step Away From Impeachment

However, in an unexpected turn of events, the acting speaker of Brazil’s Lower House of Congress, Waldir Maranhão, decided to annul the vote issued on April 17, which had allowed for the decision to pass to the Senate, which would in turn hold a final ballot on Wednesday.

Maranhão, who replaced Eduardo Cunha as the Speaker of the House after the latter was suspended due to alleged interference in the investigation of the Petroleo Brasileiro SA Petrobras (ADR) PBR (NYSE: PBR-A) corruption scandal, cited procedural flaws to justify his annulment of the Lower House vote. However, the head of the Senate committee, Raimundo Lira, assured that Wednesday’s vote would still take place.

Amid the discussion, it is unclear if the vote will actually be held, and if Maranhão’s decision can be overruled by the Senate or the Supreme Court. Nonetheless, one thing is clear: Investors don’t like uncertainty.

The iShares MSCI Brazil Index (ETF) EWZ was trading down 1.75 percent, Petrobras lost more than 7 percent, the Brazilian real tumbled 0.66 percent and the Bovespa Index dropped almost 1.4 percent.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.