On 30 June, the Brazilian real (BRL) traded at 1.56 per USD, which represents a gain of 1.2% compared with the 1.58 BRL per USD observed at the end of May. On a year-on-year basis, the real appreciated by 16.9% nominally versus the USD. Strong economic growth and a high SELIC interest rate attract large capital flows from advanced economies where nominal interest rates remain low, thus increasing the demand for the real, which is trading at historically high levels. In order to stem the appreciation, the Central Bank began to intervene directly in the foreign exchange market in early 2011 and the Finance Ministry raised the so-called financial operations tax (IOF, Imposto sobre Operac?es Financeiras). Moreover, on 5 July, Brazil's Finance Minister Guido Mantega stated that further measures might be implemented, including restraining trading in the futures and derivatives markets. Nevertheless, as inflation in Brazil hit a six-year high in June, policymakers are likely to be more indulgent with the appreciation of the real, as a stronger currency helps the Central Bank in containing inflation.
Brazil Exchange Rate
Brazilian real gains in June
June 30, 2011
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Brazil Economic News
October 18, 2016
Retail sales (excluding cars and construction) fell 0.6% in August from the previous month in seasonally-adjusted terms.
October 7, 2016
Consumer prices in September increased 0.08% over the previous month, the lowest rise since July 2014.
October 4, 2016
In August, industrial production plunged 3.8% over the previous month in seasonally-adjusted terms, which significantly contrasted the 0.1% expansion recorded in July and marked the worst result since January 2012.
October 3, 2016
The Markit manufacturing Purchasing Managers’ Index (PMI) rose slightly in September, increasing from August’s 45.7 to 46.0.
September 28, 2016
Business sentiment improved in September, according to the Getulio Vargas Foundation’s (FGV, Fundaçao Getúlio Vargas) business confidence indicator.