Brazilian Real Hits Lowest Since May
The Brazilian real weakened towards 5.62 per USD in November, its lowest since May of last year, amid prospects that a vote on the government’s fiscal measures will be postponed. Senate President Alcolumbre said that if any lawmaker needs more time to analyze the complementary fiscal adjustment bill, the discussion could be delayed. The bill combines measures to contain spending and increase revenue; if approved, it is projected to yield savings of R$50 billion to R$60 billion in 2027. The government has faced market pressure to announce fiscal adjustments after Brazilian assets plunged following President Lula’s late-October reelection. Meanwhile, annual inflation rose to 4.63% in October from 4.58% in September, below market expectations of 4.74% but marking a four-month high and remaining above the BCB’s 4.5% target ceiling. With 12-month inflation still above target, the central bank is expected to remain cautious about resuming its Selic easing cycle.
The Brazilian real weakened towards 5.62 per USD in November, its lowest since May of last year, amid prospects that a vote on the government’s fiscal measures will be postponed. Senate President Alcolumbre said that if any lawmaker needs more time to analyze the complementary fiscal adjustment bill, the discussion could be delayed. The bill combines measures to contain spending and increase revenue; if approved, it is projected to yield savings of R$50 billion to R$60 billion in 2027. The government has faced market pressure to announce fiscal adjustments after Brazilian assets plunged following President Lula’s late-October reelection.
Meanwhile, annual inflation rose to 4.63% in October from 4.58% in September, below market expectations of 4.74% but marking a four-month high and remaining above the BCB’s 4.5% target ceiling. With 12-month inflation still above target, the central bank is expected to remain cautious about resuming its Selic easing cycle.