Lula’s Free Transport Plan Stokes Fiscal Fears, Sends Real Lower

Brazil’s government is studying the feasibility of offering free public transportation nationwide, Finance Minister Fernando Haddad said on Tuesday, stoking fiscal concerns that sent the real tumbling.

In an interview with TV Brasil, Haddad said the finance ministry is exploring different ways to fund the program, which was requested by President Luiz Inacio Lula da Silva a year before the next election for head of state.

The Brazilian real weakened 0.6% in early trading, underperforming other emerging-market currencies, while swap rates rose.

Haddad did not say when the government might implement the program.