Brazil's Finance Minister Fernando Haddad on Thursday sought to calm the market following a meltdown over the announcement of a reform that would increase income tax exemptions, emphasizing that the measures would be fiscally neutral and take effect only in 2026 after Congress approval.

Brazil Finance Minister Fernando Haddad unveiled a long-sought plan to cut 70 billion reais ($11.8 billion) from public spending through 2026 as investors’ fiscal concerns sink assets from the currency to stocks.

Brazil President Luiz Inacio Lula da Silva has tacked on an income-tax relief measure to a long-awaited plan to cut government spending, heightening concerns about the budget deficit and sparking a selloff in the currency,

Brazilian Finance Minister Fernando Haddad will make a televised address to the nation at 8:30 pm (2330 GMT) local time on Wednesday, the ministry said, adding he will talk about "efficient government".