On a day of tension in Brazil and abroad, the dollar approached R$5.60 this Thursday (18). The Stock Exchange (B3) fell more than 1% and fell back to 127 thousand points.
The commercial dollar closed the day sold at R$5.587, up R$0.104 (+1.89%). The price rose throughout the day until closing close to its maximum values.
With today’s performance, the US currency, which had accumulated a decline in July until yesterday (17), began to register stability in the month. In 2024, the currency rose 15.12%.
The stock market was also tense today. The Ibovespa index, from B3, closed at 127,652 points, down 1.39%. The Brazilian stock exchange followed the movement in Brazil and abroad.
Stock markets around the world fell sharply today due to the collapse of shares in artificial intelligence companies. In addition, the dollar rose again against emerging market currencies, such as Brazil, with the rise in US Treasury bond rates.
Tensions
On the domestic front, the day was dominated by tensions surrounding the 2024 budget cuts, which will be announced next Monday (22). Early in the evening, after the Brazilian market closed, Finance Minister Fernando Haddad announced a R$15 billion budget cut, following the Budget Execution Board (JEO) meeting.
Faced with pressure, Haddad announced the cuts in advance. Of the total amount withheld from the budget, R$11.2 billion will be set aside and R$3.8 billion will be blocked. The JEO is composed of the Minister of Finance, Fernando Haddad; Minister Simone Tebet; Chief of Staff Rui Costa; and Minister of Management and Innovation in Public Services, Esther Dweck.
Both contingency and freeze represent temporary spending cuts. The new fiscal framework, however, has established different motivations. A freeze occurs when government spending grows more than the limit of 70% of revenue growth above inflation. A contingency occurs when there is a lack of revenue that compromises compliance with the primary result target (result of government accounts without interest on public debt).
* With information from Reuters
