Rises and falls in dollar quotations are usually associated with errors or merits of the incumbent, but in general there are also external factors at work, which are often more decisive.
This is what can be seen in the recent rise in the American currency against the real. On Monday (1st), the currency reached R$5.06, the highest level since October — which led the Central Bank to announce the first intervention in the foreign exchange market during the third term of Luiz Inácio Lula da Silva (PT ).
From what can be observed, there are no new facts or perceptions about domestic economic policy that motivate this trend. According to the most consensual reading, the change in rates reflects the strength of the US economy more than a weakening of the Brazilian one.
On Monday, data on the strength of the American industrial sector was released, in addition to other favorable indicators, particularly those of the labor market.
This means the prospect of high interest rates for longer to contain inflation in the largest global economic power, which obviously favors dollar investments and demand for the currency.
The same movement helps to explain the fall of the Stock Exchange, given the withdrawal of investments by foreigners.
However, external motivation does not mean that the rise in the dollar should no longer deserve attention and measures. It tends to make imported products more expensive and make it more difficult to combat domestic inflation and, ultimately, reduce interest rates.
In the coming days we will know if the BC intends to take further measures in this area. The experience of floating exchange rates teaches, in any case, that one should only intervene punctually, in moments of greater instability or risks to liquidity, without intending to impose artificial prices.
Beyond the immediate doubts, economic policy needs to contribute to making the real a less volatile currency and susceptible to market moods, with advances in revenue and public spending reforms, in addition to opening up the economy and international trade.
