Brazilian Real Set to Plunge After Lula’s Re-election Win

2026-10-26 02:22 By Judith Sib-at 1 min. read

The Brazilian real is expected to fall by more than 10% on Monday, according to a CME currency futures contract, following President Luiz Inácio Lula da Silva’s narrow re-election victory over Senator Flávio Bolsonaro in Sunday’s runoff.

With nearly all ballots counted, Lula secured 51.8% of valid votes, while Bolsonaro received 48.2%.

Lula’s win defied polls that had favored Bolsonaro after his narrow first-round lead earlier this month.

Since Brazil restored direct elections in 1989, Lula is the first candidate to win a runoff after losing in the first round.

Meanwhile, Bolsonaro has called for the election results to be annulled.

Investors are focused on the nation's increasingly fragile fiscal outlook and how Lula’s new administration plans to curb public spending and stabilise the high debt burden.

Public debt has climbed above 82% of GDP, raising concerns over debt sustainability and contributing to higher borrowing costs.



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