Reflecting the deteriorating economic conditions, the country’s unemployment rate hit 6.4% in April, its highest in four years. Inflation is expected to rise to 8.26% at the end of the year and has also breached the central bank’s upper band of 4.5% plus or minus 2 percentage points.

Additionally, the government stated it would freeze R$69.9 billion in discretionary expenditures and hike taxes on banks and brokerages, among other measures.

iShares MSCI Brazil Capped ETF

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Max Chen contributed to this article.