By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The U.S. dollar depreciated slightly on Wednesday, August 26th in Brazil, after two days of extreme volatility due to the economic turmoil caused by the instability of major stock markets around the world. The foreign exchange rate in Brazil closed on Wednesday at R$3.601/US$ after registering on Tuesday the lowest value in twelve years, of R$3.6084/US$.
At foreign exchange houses in Rio de Janeiro and São Paulo, however, the U.S. currency was being sold above R$4.00/US$. Despite the slight appreciation of the Brazilian currency on Wednesday, the U.S. dollar still registered gains of over three percent for the week, 5.16 percent for the month and over 35.4 percent for the year.
Financial analysts say the depreciation of the Brazilian real in the past few months is not only due to the instability seen in the global economy, but because of domestic turmoil.
President Dilma Rousseff is facing an onslaught of negative economic indicators since she began her second term in office, in October of 2014. Inflation has been steadily increasing, while unemployment closed at 7.5 percent, the highest rate for the month in six years.
The on-going depreciation of the Brazilian real in relation to the U.S. dollar has led to a sharp decline of Brazilians travelling abroad. The latest data from the Central Bank shows that Brazilians spent US$1.68 billion abroad in July, one of the busiest months of the years for international travel; 30.4 percent less than they did in July of 2014.