RIO DE JANEIRO, BRAZIL – The dollar closed up 0.95 percent at R$5.6068 on Friday. This is its highest value in the past three months and was aided by domestic fiscal unease and the bullish US currency abroad.
Throughout the day, the currency climbed 1.44 percent to R$5.634 but retreated with positive employment data. During the week, the dollar rose by 3.31 percent.
For Sydney Nehme, an economist and NGO brokerage director, the dollar’s performance is the factor that most immediately reflects the market’s concern over Brazil’s worsening fiscal situation.
In his opinion, insofar as it heightens the risk perception, it has repercussions on the price of the dollar, leading it to shift from the external behavior of the US currency.
“Not as a reflection of an increase in cash market outflows, but rather as protection with an increase in demand in the futures market, which is ahead of all others”.
The economist further states that a higher exchange rate was a government goal, which aimed to render the country more attractive and cheaper for foreign investors.
However, he adds that the goal was unsuccessful because it did not implement the privatization program, but ultimately helped the export sector, particularly agribusiness.
“It didn’t have reciprocity as a stimulus for the domestic industry to replace the imported products, given that it failed to show interest in making investments, and now everything is a little burdened by the coronavirus pandemic crisis”.
Source: Exame
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