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Montevideo, July 2nd 2022 - 23:48 UTC

 

 

Brazil's real sinks against US dollar to lowest rate in 10 years

Wednesday, December 17th 2014 - 00:53 UTC
Full article 6 comments
Brazil's currency slips to 2.76 against 1 US dollar Brazil's currency slips to 2.76 against 1 US dollar

The currency closed at R$ 2.76 per US$ 1 dollar. Domestic politics, international oil prices, US Fed measures and Russian ruble drop to blame.

 Brazil's real fell to its lowest in almost ten years on Tuesday, as the ups and downs of domestic politics render the central bank's currency-intervention program useless to regain investor confidence, and hit the R$ 2.76 per US$ 1 dollar mark.

The dollar is up 4.42 percent in December and 13.9 percent in the year. On March 29, 2005, the rate had closed at US$1 to R$2.702.

Also affecting the exchange scale on the international arena were a deep plunge by the Russian ruble, the United States' Federal Reserve (Fed) terminating its dollar injection plan in the world economy, driven by the local recovery in employment, and the steady drop of oil prices.

After the reelection of President Dilma Roussef, the Central Bank Monetary Policy Committee (COPOM) increased the Selic rate (basic interest rates) to 11.75 percent per year. Consistent with economic orthodoxy, this move was supposed to prop up the real, by widening the difference between Brazilian rates against those of the United States and consequently make Brazil more attractive to international investors. But so far it has not happened.

The Bovespa stock index opened on Tuesday more than 2 percent negative, but bounced back shortly after when shares of PetroBras pulled up from a six-day downtrend with the help of bargain hunters, despite oil price plunging worldwide.

With Brent crude falling below 60 dollars for the first time since July 2009, Russia said it would not reduce its oil output to help prop up prices, neither will it seek similar measures from OPEC countries.

 

Categories: Economy, Brazil.

Top Comments

Disclaimer & comment rules
  • ilsen

    Oooops Dilma!
    Guess you are just keeping it 'real' ?
    lol!
    Seriously;
    If only those people that voted for you understood what this means. But you kept them poor, un-educated and state-dependent, didn't you?
    Populisim so loves the poor, it multiplies them.
    Will Done Dilma, you have put back Brazil by one more generation in order to satisfy your political aims.
    The world is becoming aware, it will filter down.
    Tik, tok, tik, tok...

    Dec 17th, 2014 - 01:30 am 0
  • ChrisR

    I suspect that the fucking around with Mr. Market by DumbAss and “The liar Mantega” is coming home to roost.

    I told you it would DumbAss: it ALWAYS does.

    Dec 17th, 2014 - 05:23 pm 0
  • Jack Bauer

    Brazasshole,

    care to comment on your mother's performance ??

    Dec 17th, 2014 - 10:22 pm 0
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