The Brazilian real hovered around the 4-month low level of $5.2, after the country’s central bank hinted of more interest-rate hikes while indicating the Selic rate to remain at a significantly higher value for a longer period to deal with hot inflation levels. To make things worse, S&P Global included Brazil among the list of 4 other vulnerable emerging market countries which could see their credit ratings come under pressure as rising global interest rates hit already stretched finances. Meanwhile, the country's central bank raised the key interest rate by 50 bps in June, for the 11th time in a row since it started tightening in March last year. Further, Brazilian central bank’s director of international affairs recently said that Brazil would face more moderate growth in the following quarters and an “assertive” action by the central bank is necessary for inflation to converge to the government’s official target.
Historically, the Brazilian Real reached an all time high of 5.99 in May of 2020. Brazilian Real - data, forecasts, historical chart - was last updated on July of 2022.
The Brazilian Real is expected to trade at 5.48 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 5.94 in 12 months time.