The dollar closed this Wednesday (27) at R$5.912 after reaching a maximum of R$5.92 throughout the day. The main factor that influenced the devaluation of the real was the government’s announcement that it will expand the exemption from Personal Income Tax (IRPF) for those earning up to R$5,000, compared to the current R$2,259.20.
The expansion of the IR exemption range was a campaign promise from President Lula (PT) and must be accompanied by greater taxation on the richest, seeking to maintain balanced revenue.
The measure generated a strong negative reaction in the market, undermining confidence in the government’s fiscal efforts and putting pressure on domestic assets. Investors estimated that the measure would throw water on a recovery of the real.
The 1.80% increase took the American currency to its highest nominal value since the creation of the real, close to the historic record of R$5.93 registered in May 2020, at the height of the Covid-19 pandemic. Ibovespa, the main index of the Stock Exchange (B3), closed down 1.46%, at 128,030 points.
The devaluation of the real, which accumulates a drop of 16.8% in the year, is one of the biggest in Latin America, second only to the Argentine peso, points out Quantum Finance, a provider of financial information.
In addition to the dollar, future interest rates also increased: the DI for January 2026 rose from 13.28% to 13.53%; that of January 2027, from 13.335% to 13.64%; and January 2029, from 13.08% to 13.475%.
Hours earlier, the government confirmed that the Minister of Finance, Fernando Haddad, will make an official statement at 8:30 pm to detail the measure and explain the long-awaited spending cut package.
The government is betting on expanding IR as a way of mitigating criticism of the social impact of the fiscal adjustment package, which should include changes to benefits such as the continuous payment benefit (BPC) and the salary bonus, as well as adjustments to the social protection system for Armed Forces and the constitutional floor of education.
Calculations by the think tank Centro de Liderança Pública (CLP) indicate that the savings generated by the minimum age of 55 tend to be small, at R$12 million in 2025. The contribution to health, in turn, could generate revenue of R$ $2 billion.
Another possible measure is the extinction of “fictitious death”, a situation in which family members receive a pension from a soldier expelled for a crime or serious infraction, as if he had died. The benefit, in this case, would be replaced by a type of confinement aid.
