This marked the second consecutive session of appreciation in the domestic market and ended this Friday’s session (13), up 0.40%, quoted at R$ 6.0313. In addition to the predominant sign of high abroad and the rise in Treasury rates, which usually punish emerging currencies, the real suffered again from adjustments in risk premiums related to fiscal uncertainties amid the progress of spending containment measures in Congress.
The appreciation of the dollar could even have been more significant, had it not been for intervention by the with a spot currency sale auction, which caused the currency to lose steam and move away from the levels seen in the early afternoon, when it renewed successive highs until reaching R$6.0776. The cooling of the upward momentum also allowed the currency to end the week down 0.65%.
This afternoon, President Luiz Inácio Lula da Silva made his first appearance after having performed two procedures to treat intracranial bleeding. In a video on social media, he appears walking through Hospital Sírio-Libanês, in São Paulo, and states that “soon” he will be ready to return to work.
The absence of in Brasília, uncertainty increased surrounding the progress of the fiscal package in Congress, at a time when there is pressure from parliamentarians to change the proposed measures, which could result in a smaller economy than expected by the government. The perspective is that the measures will be considered in the plenary of the Chamber of Deputies next week. Last night, the president of the Senate, Rodrigo Pacheco, said he was optimistic about the approval of the government’s fiscal adjustment package before the parliamentary recess. According to him, it is “completely possible” to analyze all proposals by next Friday, the 20th, including budget laws.
After selling US$4 billion yesterday in two line auctions with repurchase commitments, the Central Bank today held an auction to sell dollars in cash, the first operation of its kind since August 30th. US$845 million was absorbed by the market. Nine proposals were accepted in the auction (minimum lot of US$1 million), with a cut-off rate of R$6.0200.
In recent speeches, the director of Monetary Policy and future president of the BC, Gabriel Galípolo, reiterated that the monetary authority operates in the foreign exchange market in the case of “dysfunctionality” and that it does not target a specific level of exchange rate.
*With information from Estadão Conteúdo
Posted by Carolina Ferreira
