RIO DE JANEIRO, BRAZIL – With the dollar climbing increasingly close to R$6, the Brazilian real stands as the third currency that depreciated the most in the world, ahead only of those of Zambia and Suriname. Among the main markets, no country tops Jair Bolsonaro and Paulo Guedes’ Brazil in terms of monetary depreciation.
A survey conducted by Markets Insider confirms a trend pointed out by financial consultancy Refinitiv in late September. On December 31st, the commercial dollar rate stood at R$4,02 and has now reached R$5,74. The tourism dollar has passed the R$6 mark.
The appreciation of the dollar against the Brazilian real reached 41.8 percent and is only behind the Suriname dollar, which has plummeted 89.8 percent and Zambia’s Kwacha, which has dropped 46.4 percent, over ten percentage points difference if compared to the Argentine peso, in crisis since president Mauricio Macri’s government – Bolsonaro’s ally.
According to market sources, the international instability factors are the crisis triggered by the devastating pandemic of the novel coronavirus and the elections in the U.S.A. In the specific case of Brazil, uncertainties over Guedes and Bolsonaro’s economic policy have further complicated matters and led to an investors’ flight.
The results contrast with the Minister of Economy’s forecasts, who in March said that the dollar would only reach R$5 if he were to make “many mistakes”. With the rate nearing R$6, it seems that Guedes is not on a good path.
Behind the scenes, the once “super-minister” was once again criticized, mainly because of a statement against the FEBRABAN (Brazilian Federation of Financial Institutions”) which he said was trying to sabotage his projects.
Source: Forum