Much Ado About (Almost) Nothing

BRAZIL ECONOMICS - Report 23 Sep 2024 by Alexandre Schwartsman, Cristina Pinotti and Diego Brandao

The interest rate differential between Brazil and the United States has widened in recent months, a movement that tends to appreciate the real. However, our exchange rate model indicates that this effect is relatively limited, as is the impact of the decline in the Dollar Index caused by the Fed’s monetary easing.

The depreciation of the exchange rate throughout 2024 occurred largely due to domestic factors, especially the worsening perception of fiscal policy in Brazil, as evidenced by the divergence between the movements of the real against the dollar and its emerging market peers. Therefore, a more robust exchange rate appreciation depends on an improvement in the fiscal environment, which does not seem feasible given the government's recent behavior.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.