Brazil's Temer: 'I won't resign' amid corruption allegations

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President Michel Temer's one-year-old government has been hit broadside by allegations that he may have obstructed justice by endorsing payment of hush money to a defendant in Brazil's sprawling "Car Wash" corruption investigation.

Protests are planned in several cities and opposition politicians took to Twitter and local news channels to call for Mr Temer to be impeached, arguing his government no longer has legitimacy.

That leaves impeachment proceedings as the most likely avenue to remove Temer from power, just like a year ago when Rousseff was stripped of her office and Temer, her vice president, automatically got the top job.

His statement followed one of the most chaotic sessions for the country's financial markets since the global financial crisis, with stocks on its benchmark Ibovespa falling more than 8% and the real plunging 7.5% against the US dollar, the most since 1999, despite the intervention of the central bank of Brazil.

Brazil's Real currency lost 8% of its value against the USA dollar in the first half of Thursday.

On Thursday, police searched Neves' Rio de Janeiro home and Brasilia office, and Brazil's highest court suspended him from office.

Justice Edson Fachin, who is overseeing cases related to the investigation of a $2 billion corruption scheme centred on state oil company Petrobras, approved the probe of the president's conduct.

"Temer denies wrongdoing, but his political support is ebbing, and his ratings are in single figures".

The scandal started with the revelation in O Globo newspaper on Wednesday that Temer had been been secretly recorded while talking to Joesley Batista, an executive from the meatpacking giant JBS, on March 7.

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Despite all the calls for his head, the veteran centre-right politician - who took over past year after the impeachment of leftist president Dilma Rousseff - came out swinging.

"These allegations, if proven to be true, have the potential to delve the administration into a profound political crisis", Eurasia said late Wednesday, adding that at the very least the matter will delay major reforms that Temer is trying to enact.

SAO PAULO Brazil's securities regulator has launched a probe into currency and stock trades made by executives at meatpacker JBS SA (JBSS3.SA) after they made plea bargain testimony that suggested Brazil's president had condoned bribery, Valor Econômico newspaper reported on Thursday, citing unnamed sources. "If Temer doesn't fall, he will lead a walking dead administration". Neves, who almost won the presidency in 2014 and planned to run again next year, has denied wrongdoing. Cunha has been imprisoned on a 15-year sentence for corruption.

"Michel Temer is like that boyfriend who doesn't know it's over", one Twitter user said.

"The president's resignation has become imperative to prevent the crisis from worsening", Carlos Siqueira, president of the Brazilian Socialist Party, a small member of the government coalition, told O Globo.

Senator Ricardo Ferraço (PSDB), who was in charge of drafting the labor law, confirmed Wall Street's and Brazilian finance capital's fears Thursday, saying that Temer's "reforms" were being placed on hold.

Temer had managed to avoid being tainted by the scandal, going so far as to fire ministers who tried to interfere in the investigation.

Following Globo's report, Thursday began in a panic. The allegation made in a Globo News report on Wednesday, May 17, represents a potentially significant blow to President Temer.

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