On 30 September, the Brazilian real (BRL) traded at 1.85 per USD, which represented a 14.4% nominal depreciation compared with the previous month, the biggest loss since the collapse of Lehman Brothers in September 2008. On a year-on-year basis, the real depreciated 8.6% versus the USD. The depreciation of the BRL, as well as other emerging market currencies, was triggered by mounting concerns regarding a new global economic slowdown, which led to capital flowing out of emerging markets as investors rushed to seek safer assets. The substantial weakening of the BRL triggered the Brazilian Central Bank (BCB) to intervene in the FX market and sell USD 2.75 billion of currency swaps on 22 September (when the BRL traded at 1.90 per USD) in order to boost the value of the currency. Going forward, the Brazilian currency is likely to continue to weaken, as the BCB surprisingly slashed interest rates on 31 August by 50 basis points to 12.00%. Furthermore, on 30 September, President Dilma Rousseff expressed her desire for more rate cuts, putting pressure on monetary authorities. Reduction in interest rate differentials in relation with developed countries should dampen the demand for Brazilian currency and lead to more depreciation. On a positive note, the weaker currency should make Brazil's exports more competitive in the world markets and help to narrow the current account gap, which currently stands at 2.1% of GDP.
Brazil Exchange Rate
Brazilian real posts biggest drop since September 2008
September 30, 2011
Looking for forecasts related to Exchange Rate in Brazil? Download a sample report now.
Brazil Economic News
October 19, 2016
At its 19 October meeting, the Central Bank’s Monetary Policy Committee (COPOM, Comite de Politica Monetaria) decided to cut the benchmark SELIC interest rate for the first time in four years, lowering it from 14.25% to 14.00%.
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.