Brazil's embattled President, Michel Temer, defiantly refused to step down amid a corruption probe that has engulfed the government and pummelled financial markets in Latin America's biggest economy. 

In a televised statement late Thursday, Temer insisted he had done nothing wrong and vowed to remain in power despite a Supreme Court investigation into allegations he bribed witnesses in a far-reaching probe linked to government kickbacks to favored businesses and the ouster of former President Dilma Rouseff.

"I did not buy the silence of anyone," Temer told Brazil's state broadcaster. "I will not resign."  

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 U.S. dollar, the most since 1999, despite the intervention of the central bank of Brazil.

The carnage has kept global emerging market stocks on the back foot, with the MSCI Emerging Markets Index again trading in the red Friday after falling 1.98% Thursday as investors backed away from risky bets amid the collapse in Brazil.

The scandal, which has gripped domestic politics for years, was given new life earlier this week after a major media outlet revealed details of a conversation it said was between Temer and Joesley Batista, who heads JBS SA, the world's biggest meat packing company, in which the two men allegedly discussed payments to buy the silence of a Brazillian lawmaker who led last year's movement to oust former President Rouseff.

Batista later singed a plea deal with prosecutors and admitted in a statement that he had made illegal payments to various politicians. Securities regulators are also said to be looking in to trades made by controlling shareholders of JBS, worth around $100 million, which took place around the same time Batista and his brother, JBS CEO Wesley Batista, were negotiating that plea deal with authorities.