The dollar reached R$5.60 this Friday, marking its highest value in two and a half years, on a day of nervousness in the markets. The stock market saw a slight drop, but closed the month with gains.
The commercial dollar ended the day trading at R$5.588, up R$0.081 (+1.46%). The US currency was down in the first few minutes, but quickly rose. At 3:45 pm, it reached R$5.59, the highest value since January 10, 2022, when it closed at R$5.67. In June, the currency rose 6.47% and, in the first half of the year, 15.15%. The commercial euro closed at R$5.98, approaching R$6 for the first time since February 2022.
The Ibovespa index, from B3, fell 0.32%, closing at 123,911 points. Even with today’s drop, the index rose 1.49% in the month, but accumulates a drop of 7.65% in 2024.
Internal and external factors influenced the market. In the US, the slowdown in consumer inflation encouraged the market, but the increase in Treasury yields and the lower-than-expected consumer confidence index pressured the dollar. High interest rates in advanced economies affected currencies of emerging countries, such as Brazil.
Traditionally, the last business day of the semester increases the demand for dollars by multinationals. In addition, an interview with President Lula criticizing the Selic rate of 10.5% per year and the primary deficit of R$63.9 billion in May, due to the anticipation of the thirteenth payment of Social Security, also contributed to the instability.
How the rise of the dollar affects the Brazilian economy
The rise in the dollar is detrimental to the Brazilian economy for several reasons. First, it makes imported products more expensive, increasing inflation. Second, it puts pressure on the country’s foreign debt, since the country pays more in reais to honor dollar-denominated commitments. In addition, it devalues the real, reducing the purchasing power of Brazilians abroad and affecting companies that depend on imported inputs, reducing their competitiveness.
Source: Atrevida
Earl Johnson is a music writer at Gossipify, known for his in-depth analysis and unique perspective on the industry. A graduate of USC with a degree in Music, he brings years of experience and passion to his writing. He covers the latest releases and trends, always on the lookout for the next big thing in music.
