Dollar Surpasses R$4.12 and Closes at Highest Value in Almost One Year

RIO DE JANEIRO, BRAZIL – Amidst heightened trade tensions between the United States and China, the U.S. currency rose again against the Real and closed at its highest level in almost a year.

The commercial dollar closed this Friday, August 23rd, at R$4.124,  which is 1.15 percent higher than the day before. The currency is at its highest since September 18th of last year (R$4.14).

The stock market suffered considerable losses. The Ibovespa Index, from B3 (São Paulo Stock Exchange), closed the day with a 2.62 percent drop, at 97,391 points. The indicator is at its lowest level since June 6th.

The dollar and the stock market had started the session relatively stable but began to oscillate after China confirmed that it would surcharge U.S. soybeans by five percent and wheat, corn, sorghum, beef, and pork by ten percent.

The increase represents a retaliation for the imposition of tariffs on Chinese products of US$300 billion (R$1,2 trillion) by the government of President Donald Trump.

Brazil’s Central Bank (BC) has sold the entire US$550 million lot of international reserves in the spot market to ensure the exchange rate. The operation is part of a new strategy to return to the use of foreign reserves as an instrument of exchange intervention. The last time this had happened was in February 2009, at the height of the global economic crisis caused by the fall in the subprime market in the United States.

This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error