Marcelo Assalin, who manages $8.5 billion as head of emerging-market debt, said the selloff is being exacerbated by the fact that so many big investors were overweight Brazilian assets.
The Supreme Federal Tribunal opened an investigation into the accusations and lifted the seal on the recording.
Temer is alleged to have talked with Joesley about cash payments to Eduardo Cunha, the former speaker of the House who has been jailed for his role in the sprawling Petrobras corruption scandal.
Batista delivered the evidence to the prosecution office and confirmed his testimony to a member of the Supreme Court. "The president is absolutely convinced he committed no crime, but that has to be made clear to the eyes of everyone".
Even in this country tired from the constant drip of revelations of a wide-ranging corruption investigation, the incendiary accusation set off a firestorm and Brazil's highest court opened an investigation. Brazil's Real currency lost 8 percent of its value against the USA dollar in the first half of Thursday.
Brazil's Treasury and central bank said they stood ready to keep markets liquid and working properly.
According to daily O Globo, a secret recording showed Temer authorising a payment to Eduardo Cunha.
"After that, it's hard to say what will happen", Praça said.
"I will not resign".
Television channels cut from regular programing to air scenes from Brasilia of top political leaders rushing red-faced and panic-stricken through the hallways of Congress, on their way to meet with Mr. Temer.
"I came here because I am outraged", said Rafaela Rossi, a 32-year-old drug store owner. He is being investigated in several corruption cases related to the "Car Wash" probe into kickbacks to politicians. Brazilian federal police are searching the off.
Temer was already accused of negotiating a $US40 million bribe in 2010 for PMDB, a claim he also denies.
A demonstration calling for Mr Temer to resign was reported in the city of Sao Paulo on Wednesday evening.
Globo also reported that Sen.
The newspaper says the tapes were presented in plea bargain negotiations between prosecutors and two JBS executives.
Brazil's Superior Electoral Court will start the trial process on June 6 that could lead to the Temer's impeachment - if he's proven guilty. If convicted, Temer might lose his office.
For his part, lawmaker Alessandro Molón, from the Sustainability Network (Rede) party, filed an impeachment request against Temer on accountability charges, while opposition lawmakers demanded his immediate resignation and a call to direct elections for the Presidency of the Republic. The iShares MSCI Brazil Capped exchange-traded fund plunged 16 percent.
The pressure built against Temer throughout the day. The top court suspended Neves from the Senate.
Former vice president Michel Temer assumed the presidency following Dilma Rousseff's removal from office on September 1, 2017.
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