The vice-president and minister of Development, Industry, Commerce and Services, Geraldo Alckmin, said this Thursday that he is betting on stability of the dollar against the real after the recent appreciation of the North American currency in the country.
Speaking to journalists at an event in Rio de Janeiro, Alckmin said he was already seeing fluctuations without major fluctuations in the exchange rate after the rise in the dollar last week.
“Our exchange rate is floating and it is fluctuating without major fluctuations,” stated Alckmin. “I believe that the exchange rate will stabilize. It is natural for it to fluctuate, but it is a competitive exchange rate that is helping exports.”
Last week, the dollar appreciated globally after market participants reduced expectations regarding interest rate cuts by the Federal Reserve due to strong inflation data in the United States, in addition to continued geopolitical tensions in the Middle East.
In Brazil, the North American currency reached its highest closing value against the real in more than a year, approaching the level of 5.27 reais. The Brazilian exchange rate scenario has also been attributed to greater uncertainty regarding the government’s fiscal commitment.
Since then, the dollar has retreated against the real. On Wednesday, the North American currency closed at 5.1492 reais on sale.
In the conversation with journalists, Alckmin showed confidence that the basic interest rate will fall again at the next meeting of the Central Bank’s Monetary Policy Committee (Copom), in May. He pointed out that the Selic rate, currently at 10.75%, remains high in the country.
“Interest rates are still high, but they are falling and we should see another important drop at the next Copom meeting,” said the vice-president.
Given the domestic and external panoramas, experts consulted by the BC in its Focus survey raised their projections for the Selic rate this year and next. The survey shows that the estimate for the Selic at the end of 2024 rose to 9.50%, from 9.13%, while the projection for 2025 was 9.0%, after 19 weeks at 8.50%.
In the minutes of its most recent meeting, the Copom projected a seventh consecutive cut of 0.5 percentage points in interest rates at the May meeting, but withdrew the future guidance of cuts of the same value for its future decisions, arguing that there is still uncertainty in the external environment and domestic inflation.
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