Brazilian Real Weakens

2026-03-12 15:47 By Felipe Alarcon 1 min. read

The Brazilian real weakened toward 5.22 per US dollar on Thursday as escalating energy shocks and defiant rhetoric from Tehran revived the safe haven bid for the greenback.

This retreat from recent highs comes as Mojtaba Khamenei stated that the Strait of Hormuz will remain closed which has forced a massive repricing of global inflation risks and pressured emerging market assets.

While higher crude prices near 100 dollars per barrel typically boost Brazil’s fiscal revenues, the market is increasingly focused on the threat of imported inflation.

The annual IPCA inflation rate slowed to 3.81% in February which initially fueled optimism for aggressive monetary easing.

However the BCB is now expected to proceed with caution at its March 18th meeting where traders have scaled back bets for a 50 basis point cut in favor of a smaller 25 basis point reduction to the 15% Selic rate in an effort to protect the currency’s yield cushion as global interest rate trajectories move higher for longer.



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