Brazilian Real Hits 15-month Low

The Brazilian real weakened towards 5.62 per USD in November, its lowest since May of last year, amid prospects that a vote on the government’s fiscal measures will be postponed. Senate President Alcolumbre said that if any lawmaker needs more time to analyze the complementary fiscal adjustment bill, the discussion could be delayed. The bill combines measures to contain spending and increase revenue; if approved, it is projected to yield savings of R$50 billion to R$60 billion in 2027. The government has faced market pressure to announce fiscal adjustments after Brazilian assets plunged following President Lula’s late-October reelection. Meanwhile, annual inflation rose to 4.63% in October from 4.58% in September, below market expectations of 4.74% but marking a four-month high and remaining above the BCB’s 4.5% target ceiling. With 12-month inflation still above target, the central bank is expected to remain cautious about resuming its Selic easing cycle.

The Brazilian Real touched 5.62 against the USD, the lowest since August 2025. Over the past 4 weeks, US Dollar Brazilian Real gained 11.57%, and in the last 12 months, it increased 5.86%.

The Brazilian real weakened towards 5.6 per USD in November, its lowest since June last year, amid the prospects of lower interest rates by the Central Bank of Brazil. Policymakers in the BCB suggested that the elevated interest rates have already dampened economic activity in its latest meeting minutes, hinting that rate cuts may be necessary to tame slower growth and threats to unemployment. The central bank had held its Selic rate unchanged at 13.75%, pausing five consecutive cuts as high oil prices and widening budget deficits added to pro-inflationary risks. In the meantime, hot inflation data in the US in October consolidated bets of multiple rate hikes by the Fed next year and a 25bps hike to 4.25% next month. A narrower differential between the benchmark rates would pressure the real by reducing carry trade.