:00:00. > :00:00.Those are the latest headlines from BBC World News.
:00:00. > :00:00.Now for the latest financial news with Sally
:00:00. > :00:20.Brazil's former president to become chief of staff,
:00:21. > :00:35.The Fed scales back its plans for interest rate rises, as fears
:00:36. > :00:44.Welcome to World Business Report, I'm Sally Bundock.
:00:45. > :00:47.Also in the programme: Rico Hizon will talk us through
:00:48. > :00:50.the market reaction in Asia to the news from the US central bank.
:00:51. > :00:53.But first: We start in Brazil, where President Dilma Rousseff is
:00:54. > :00:55.battling to save her government, amid a deepening political
:00:56. > :01:03.On Wednesday she confirmed her predecessor,
:01:04. > :01:05.former president Luiz Inacio Lula da Silva, will be returning to
:01:06. > :01:10.Critics say it is just an attempt to shield him from corruption charges.
:01:11. > :01:13.She says he is there to get the struggling economy back on track.
:01:14. > :01:16.Top of the list of problems, a huge corruption scandal, involving
:01:17. > :01:25.state-owned oil giant Petrobras, construction firms, and politicians.
:01:26. > :01:27.President Rousseff is facing impeachment over the scandal.
:01:28. > :01:30.But Brazil is also facing the worst economic crisis in a generation.
:01:31. > :01:33.The economy shrank 3.8% last year, the biggest slump in a quarter
:01:34. > :01:45.At the same time consumer prices are soaring,
:01:46. > :01:48.Many Brazilian families are struggling with high levels of
:01:49. > :01:51.household debt, and rising interest rates have piled on the pressure.
:01:52. > :01:53.Former president Lula has been calling for more public spending
:01:54. > :02:11.Foreign investors fear Brazil could now abandon its austerity measures.
:02:12. > :02:13.News of Lula's return caused sharp falls in Brazil's currency
:02:14. > :02:17.Daniel Gallas reports from Sao Paolo.
:02:18. > :02:26.This is a former president Lula two weeks ago, hours after having been
:02:27. > :02:31.detained for questioning as part of a probe into corruption. But now, in
:02:32. > :02:35.a surprising turn of events, he is back in the heart of politics as a
:02:36. > :02:40.Cabinet Minister. Usually when politicians are involved in
:02:41. > :02:45.corruption investigations they are suspended or fired, not invited
:02:46. > :02:50.government that these are very strange times in Brazilian politics.
:02:51. > :02:55.Former president Lula remains a very influential politician, and right
:02:56. > :02:58.now President Dilma Rousseff needs all the help that she can get as she
:02:59. > :03:02.fights for her political survival. Time is running out for Dilma
:03:03. > :03:06.Rousseff to react to a serious political crisis. She may be
:03:07. > :03:10.suspended from office as early as May if she loses support from
:03:11. > :03:14.Congress. They will decide whether to carry on with an impeachment
:03:15. > :03:19.process against her. Dilma Rousseff is accused of allegedly doctoring
:03:20. > :03:26.government accounts this year. Bringing in Lula to negotiate with
:03:27. > :03:32.Congress is her last ditch effort to save her government. TRANSLATION:
:03:33. > :03:36.This was an extreme measure taken by the government, which reveals how
:03:37. > :03:47.alone it is incapable of establishing alliances in Congress.
:03:48. > :03:51.But millions of Brazilians who went to the streets on Sunday in one of
:03:52. > :03:55.the largest demonstrations in the country's history have very strong
:03:56. > :04:00.views against Lula. They believe he has only accepted the job in Cabinet
:04:01. > :04:05.in order to get job privileges in case he is charged with being
:04:06. > :04:10.involved in the corruption scandal in state oil giant Petrobras. These
:04:11. > :04:11.will be testing times for Dilma Rousseff if she is to reach the end
:04:12. > :04:13.of her term. Jimena Blanco is principal analyst
:04:14. > :04:27.for the Americas at How do you think this will play
:04:28. > :04:31.out? Well, I think it is a very dangerous political strategy on the
:04:32. > :04:36.part of the Dilma Rousseff administration. The government is
:04:37. > :04:43.clearly trying to settle the coalition and ensure that they
:04:44. > :04:50.remain within the coalition base. That is their main coalition ally.
:04:51. > :04:53.The government's party, which is the party of the Vice President, have
:04:54. > :04:58.had a very fraught relationship over the past year and over the weekend
:04:59. > :05:02.they gave himself 30 days to decide whether they will stay in the
:05:03. > :05:06.coalition or whether they will leave. The idea behind the
:05:07. > :05:10.appointment of Lula as chief of staff is that he will be able to
:05:11. > :05:15.ensure that the relationship with the party doesn't break down further
:05:16. > :05:22.and that their base in Congress doesn't walk away from the coalition
:05:23. > :05:28.and vote in favour of Dilma Rousseff's impeachment. However,
:05:29. > :05:32.having said that, as Daniel pointed out, massive protests over the
:05:33. > :05:36.weekend. Officially it was 3 million but many say it is far more than
:05:37. > :05:41.that. Protests overnight as well. In terms of the short-term risk for
:05:42. > :05:50.Rousseff, she has pretty... You know, incredible act to pull this
:05:51. > :05:59.off, hasn't she? Given all the headwinds against them. Yes, our
:06:00. > :06:02.view is if the appointment of Lula strengthens the anti-government
:06:03. > :06:07.protests, which we saw over the weekend and last night, and they are
:06:08. > :06:11.very much against Lula's involvement in government and very much in
:06:12. > :06:14.favour of him facing potentially criminal charges in the Federal
:06:15. > :06:21.Court 's, then there is a significant risk that the party will
:06:22. > :06:26.decide in 30 days' time that enough is enough, it is time to move on and
:06:27. > :06:33.prepare ourselves for 2018 and see whether we can go it alone. 2018 is
:06:34. > :06:37.the general election, but there are 48 politicians across parties all
:06:38. > :06:42.being investigated. It is not just Rousseff herself as an individual,
:06:43. > :06:46.Lula and a few around her, it is actually 48 all editions. Yes, and
:06:47. > :06:53.they come from numerous parties within the ruling coalition and the
:06:54. > :06:56.opposition. So the investigation of the case could actually remove a lot
:06:57. > :07:02.of potential presidential hopefuls from the race in 2018, and the
:07:03. > :07:08.electorate may not have a very clear choice. Thank you for coming in, and
:07:09. > :07:10.of course we will keep an eye on that story very closely.
:07:11. > :07:14.America's central bank left interest rates unchanged on Wednesday,
:07:15. > :07:15.amid growing uncertainty about the global economy.
:07:16. > :07:19.It said it was on track to raise the cost of borrowing again this year.
:07:20. > :07:22.But it has scaled back the pace of planned rate rises,
:07:23. > :07:36.When in doubt, wait. That seems to be the thinking, at least, of the US
:07:37. > :07:39.Federal reserve as it left its key interest rate unchanged. Officials
:07:40. > :07:43.also pencilled in just two rate hikes this year instead of the four
:07:44. > :07:47.assumed back in December, essentially leaving rates are lower
:07:48. > :07:52.for longer. The bank's chair Janet Yellen made it clear the main reason
:07:53. > :07:59.for the Fed's change was concerned about slower global growth. You have
:08:00. > :08:07.seen a shift this time in most disciplines' assessments of the
:08:08. > :08:10.appropriate path for policy -- most participants' assessments. That
:08:11. > :08:16.largely reflects a somewhat slower projected path for global growth,
:08:17. > :08:20.for growth in the global economy, outside the United States. Like the
:08:21. > :08:25.Bank of England and the European Central Bank, the Fed is worried
:08:26. > :08:31.about lower global growth so while it is becoming easier for Americans
:08:32. > :08:37.to find a job and despite signs of inflation is modest, politicians
:08:38. > :08:41.want to proceed cautiously to allow the US economy more time to recover.
:08:42. > :08:46.Investors seemed pleased with this more gradual approach, the S 500
:08:47. > :08:50.closing at its highest for the year. Markets are on the rise in Asia
:08:51. > :08:53.after that news from the Fed. Rico Hizon is tracking
:08:54. > :09:02.developments for us in Singapore. Nice to see you. How is it going
:09:03. > :09:07.that? A lot of these risky assets are rising in Asia. Stocks in
:09:08. > :09:14.emerging market currencies, an oil all in positive territory. Traders
:09:15. > :09:17.say that the Fed's newsstands is relatively friendly. The potential
:09:18. > :09:21.for more money to continue flowing into commodities and equities rather
:09:22. > :09:29.than being lowered by higher US interest rates is boosting crude oil
:09:30. > :09:39.and emerging market stock. -- new stance. You are seeing the negate
:09:40. > :09:42.two to five, -- Nikkei 225, and other Asian stocks in positive
:09:43. > :09:46.territory in this hour. Other analysts say that removing the
:09:47. > :09:52.interest rate risk in the near term is enough to lure money back into
:09:53. > :09:54.risky assets but price increases in the likes of gold and the
:09:55. > :10:01.depreciation of the US dollar and the game of the Japanese yen which
:10:02. > :10:08.are safe haven assets, would indicate there is still a a degree
:10:09. > :10:13.of risk in the marketplace. Other currencies firming up today. Thank
:10:14. > :10:13.you very much for keeping us up to date.
:10:14. > :10:17.In other news: The Bank of England is expected to leave interest rates
:10:18. > :10:28.unchanged at 0.5% when it meets to set policy later.
:10:29. > :10:32.A cargo ship carrying millions of pounds worth of luxury cars lost
:10:33. > :10:36.control and ended up on a sandbank in the Solent, because