Brazilian Real Strengthens Following Inflation Data

2026-09-25 21:09 By Isabela Couto 1 min. read

The Brazilian real strengthened slightly to 5.12 per US dollar in September following the release of stronger-than-expected mid-month inflation.

Brazil’s mid-month headline inflation rose to 4.47% year over year in September from 4.24% previously, exceeding the 4.30% market consensus.

Persistent inflationary pressures could reduce prospects for the continuation of the Selic easing cycle.

The 12-month rate is back above the upper bound of the BCB’s target range.

The BCB cut its policy rate by 25 bps to 13.75% at its September meeting and left its next steps open, while Copom’s minutes were more hawkish than expected.

Abroad, oil prices fell, easing some energy-related pressures, although the external environment remained challenging as global yields rose above recent historical levels before halting their rally on the oil pullback.

The US Fed raised its federal funds target rate at its latest meeting.

The narrowing interest-rate differential remains a factor supporting the dollar.



News Stream
Brazilian Real Strengthens Following Inflation Data
The Brazilian real strengthened slightly to 5.12 per US dollar in September following the release of stronger-than-expected mid-month inflation. Brazil’s mid-month headline inflation rose to 4.47% year over year in September from 4.24% previously, exceeding the 4.30% market consensus. Persistent inflationary pressures could reduce prospects for the continuation of the Selic easing cycle. The 12-month rate is back above the upper bound of the BCB’s target range. The BCB cut its policy rate by 25 bps to 13.75% at its September meeting and left its next steps open, while Copom’s minutes were more hawkish than expected. Abroad, oil prices fell, easing some energy-related pressures, although the external environment remained challenging as global yields rose above recent historical levels before halting their rally on the oil pullback. The US Fed raised its federal funds target rate at its latest meeting. The narrowing interest-rate differential remains a factor supporting the dollar.
2026-09-25
Brazilian Real Steady After Selic Cut
The Brazilian real traded near R$5.15 per US dollar in September, little changed after the BCB cut the Selic rate by 25 basis points to 13.75%. The BCB left its next steps open, saying that the current environment of uncertainty calls for composure and caution in the conduct of monetary policy. It was the final monetary policy meeting before the presidential election in October. The decision was announced after the US Federal Reserve raised its federal funds target rate by 25 basis points to a range of 3.75% to 4.00%. The narrowing interest-rate differential is a factor supporting the dollar, although it had already been priced into markets, with both rate decisions coming in line with expectations. Meanwhile, gains by Flávio Bolsonaro in recent presidential election polls have supported the real, as markets view Bolsonaro as fiscally restrictive, while elevated domestic yields and weak business activity continue to weigh on the economic outlook.
2026-09-17
Brazilian Real Strengthens on Lower Inflation
The Brazilian real strengthened slightly to around 5.08 per US dollar in September, reaching a more than one-month high following lower-than-expected inflation data. Brazil’s annual inflation rate eased to 4.22% in August 2026 from 4.44% in July, slightly below forecasts of 4.27% and moving further within the central bank’s target range of 1.50%-4.50%. With the Selic elevated, upward pressure on real returns on bonds is increasing the attractiveness of fixed-income market to foreign investors seeking yield. Also, lower inflation reduces the country’s risk premium, boosting foreign investor confidence. However, the data raised bets that the BCB will cut the Selic by at next week’s Copom meeting. This would narrow the rate differential, as bets on a Fed rate hike remain high following US CPI coming largely in line with forecasts. Meanwhile, gains by Flávio Bolsonaro in recent presidential election polls have supported the real, as markets view Bolsonaro as fiscally restrictive.
2026-09-11