Brazil: Brazilian real rallies in March
March 14, 2016
The Brazilian real (BRL) halted its downward slide in recent weeks and rallied to the strongest value seen since August 2015. On 11 March, the real closed the day at 3.58 BRL per USD, which represented a sharp 10.8% appreciation over the same day of the previous month. The real has gained 9.6% year-to-date, yet remains 14.6% weaker in value from the same day of the previous year.
The real’s appreciation comes on the back of a stabilization in commodity prices and expectations of a delay in further interest rate hikes in the U.S. which has boosted many emerging market currencies. In addition, political developments in Brazil are behind the real’s gain. Large protests and an ongoing corruption scandal has put the government under pressure and speculation that a more effective and reform-oriented administration may be in the cards is contributing to the rally.