Brazil’s real regained ground on Oct. 27 after a sharp post-election decline, as official exchange-rate data showed a rebound and analysts said fiscal choices would help shape the currency’s direction.
Banco Central do Brasil’s PTAX dollar sale rate was 5.3346 reais per U.S. dollar on Oct. 27 at noon ET (4 p.m. UTC; 1 p.m. Brasília time), down from 5.5007 at the previous day’s close. The bank’s PTAX series shows the rate rising from 5.03740 on Oct. 23 to 5.50025 on Oct. 26, equivalent to an 8.4% fall in the real’s dollar value. Because the quote measures reais per dollar, a lower reading means fewer reais were needed to buy a dollar.
In a report timestamped 10:35 a.m. ET (14:35 UTC) on Oct. 27, Reuters said the real had strengthened nearly 2% to around 5.31 reais per dollar after a fall of more than 11% in the preceding session.
FXStreet reported Oct. 27 that Societe Generale strategists saw the next finance minister and fiscal policy as factors in the real’s direction. They attributed the earlier drop to investors closing positions that had favored a stronger real. Reuters also reported that bets on a Flávio Bolsonaro victory contributed to the selloff. Finance Minister Dario Durigan told reporters in Brasília, according to Reuters: “It was not a reaction to fundamentals.”
Brazil’s Tribunal Superior Eleitoral (TSE) said President Luiz Inácio Lula da Silva won re-election in the Oct. 25 runoff with 51.79% of valid votes, compared with 48.21% for Flávio Bolsonaro. The official count gave Lula 64,256,232 votes and Bolsonaro 59,826,041. EconoTimes previously reported a sharp drop in Brazilian real futures after Lula’s victory.
The Fundação Getulio Vargas’ Brazilian Institute of Economics (FGV IBRE) calendar lists the October IGP-M inflation index for Oct. 29. The central bank’s next Monetary Policy Committee (Copom) meeting is scheduled for Nov. 3-4, while the Brazilian Institute of Geography and Statistics (IBGE) lists its October IPCA consumer-price index for Nov. 12.
