Brazil's financial markets declined Tuesday over concerns that the nation's new finance minister, Guido Mantega, will raise government spending and push for lower interest rates in a bid to speed economic growth.
But in a news conference Tuesday, Mantega tried to calm the nervous markets, saying Brazil should have interest rates that make it possible to stimulate production and consumption. Mantega also stressed continuity regarding economic policies.
Mantega - president of Brazil's national development bank - replaces Antonio Palocci, who resigned Monday after being caught up in a political scandal. Palocci was accused of frequenting a house in Brasilia where lobbyists held parties with prostitutes and money arrived by the suitcase, possibly for political payoffs. He denies ever setting foot in the house.
Palocci was respected by analysts and investors because he helped cut inflation and control government spending. Mantega also praised Palocci, saying Brazil is better off than it was three years ago and is now on a path of sustained growth.
Brazil is Latin America's largest economy.
Some information for this report was provided by AFP, AP, Bloomberg and Reuters.