We’re covering the positive impacts of the devaluation of the Brazilian currency. The latest cabinet firing. And the left-wing trying to make life harder for banks and big business.
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The Brazilian currency can’t stop falling. But that’s not necessarily a bad sign
The U.S. Dollar-Brazilian Real currency exchange continues to beat nominal records. On Wednesday, the USD closed the day at BRL 4.35. This year, the Brazilian currency has lost 8 percent—more than any other in the world—fueled by a flight of foreign capital from low-risk, fixed-income assets in Brazil after the Central Bank slashed interest rates, thus reducing their profitability.
Why it matters. According to analysts, gone are the days where the currency exchange sat below USD 1 : BRL 2. A high USD might be the new normal for Brazil, analysts warn.
Half-full. Pablo Spyer, director at investment firm Mirae Asset, says this new reality is not a bad thing. “We had a stronger currency with high benchmark interest rates. Now, the USD is more expensive, but interest is lower. That’s a good trade-off.”
Credit. This new outlook has pushed local investors into buying riskier assets such as...