September 12, 2017 / 6:09 PM / a year ago

EMERGING MARKETS-Brazil currency weaker as Temer falls under police suspicion

    By Bruno Federowski
    SAO PAULO, Sept 12 (Reuters) - The Brazilian real weakened
on Tuesday after police said they suspected President Michel
Temer, alongside a group of close aides from his party,
participated in illegal acts.
    In a report on Monday, police said there were indications
that Temer and the so-called "Gang of the Lower House" might
have engaged in active and passive corruption acts, fraud and
other crimes.
    The report could provide additional evidence for a second
formal corruption accusation against Temer in as many months.
    That could force Temer to spend political capital to
convince lawmakers to drop the charges, as they did two months
ago, instead of garnering support for market-friendly reforms. 
    The Brazilian real weakened 0.5 percent, backing
further away from a six-month peak touched earlier this week.
    The country's benchmark Bovespa stock exchange,
however, rose 1.2 percent to a new all-time high after setting a
record the day before.
    Shares of state-owned power utility Centrais Elétricas
Brasileiras SA led the gains, hitting the highest
levels since December after the government said it will release
a privatization model for the firm this month.
    Cia Energética de Minas Gerais SA, Brazil's No. 3
power utility, also contributed to the gains. Cemig, as the
company is known, could join with miner Vale SA to
bid for a number of hydropower dams in an upcoming auction, Vale
told Reuters.
    Other Latin American markets seesawed, with the Mexican peso
 slipping 0.4 percent and the Colombian peso rising
0.3 percent.
    The Chilean peso closed flat, as traders booked
profits on the currency's recent rally despite rising prices of
    Key Latin American stock indexes and currencies at 1725 GMT:
 Stock indexes               Latest        Daily  YTD pct
                                             pct   change
 MSCI Emerging Markets         1,102.51      0.3    27.48
 MSCI LatAm                    2,984.55    -0.03    27.55
 Brazil Bovespa               75,221.44     1.21    24.90
 Mexico S&P/BVM IPC           50,600.71     0.48    10.86
 Chile IPSA                    5,168.71     0.32    24.51
 Chile IGPA                   25,830.36     0.27    24.58
 Argentina MerVal             23,747.48    -1.33    40.37
 Colombia IGBC                11,208.32    -0.41    10.67
 Venezuela IBC               303,209.69     8.54   856.34
 Currencies                      Latest    Daily  YTD pct
                                             pct   change
 Brazil real                     3.1214    -0.59     4.09
 Mexico peso                    17.7450    -0.39    16.90
 Chile peso                         622     0.07     7.83
 Colombia peso                 2,912.95     0.32     3.04
 Peru sol                         3.233    -0.06     5.60
 Argentina peso (interbank)     17.0800     0.35    -7.06
 Argentina peso (parallel)        17.83     0.62    -5.66
 (Reporting by Bruno Federowski; Editing by Andrea Ricci)
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