On a day of strong stress in Brazil and abroad, the dollar surpassed the R$6.20 mark and closed again at the highest nominal value since the creation of the Real Plan. The stock market fell more than 3% and reached its lowest level since the end of June.
The commercial dollar ended this Wednesday (18) sold at R$6.267, an increase of R$0.172 (+2.82%) in a single day. On a day without interventions from the Central Bank (BC), the price started at around R$6.11. It slowed down at the end of the morning, but rose sharply again after a statement from the Minister of Finance, Fernando Haddad, that the US currency must settle.
From 3pm onwards, prices accelerated again following the outcome of the Federal Reserve (Fed, North American Central Bank) meeting. The monetary authority cut the basic rates of the largest economy on the planet by 0.25 percentage points, as expected. However, it indicated in the statement that it will become more cautious in 2025, which opens up the possibility of fewer cuts next year.
In the stock market, the day was also one of intense instability. The Ibovespa index, from B3, closed at 120,772 points, a drop of 3.15%. The indicator is at its lowest level since June 20 and accelerated the fall after the Fed’s decision. In the United States, the Dow Jones, one of the New York Stock Exchange indexes, fell 2.2%.
Base rates in the United States are currently between 4.25% and 4.5% per year, considered high by international standards. High interest rates in advanced economies encourage capital flight from emerging countries, putting pressure on the dollar and the stock market in Brazil, at a time of uncertainty due to the vote on the fiscal package in Congress.
On Tuesday night, the Chamber of Deputies approved the first complementary bill to the mandatory spending cut package, which restricts the granting of tax incentives in years of primary deficit and allows the linear cut of parliamentary amendments in the same proportion as the cutting discretionary (non-mandatory) spending. In theory, deputies will vote on the rest of the package this Wednesday, but the session had not started until late afternoon.
*With information from Reuters
