Brasília – For the sixth straight day, the United States dollar price has increased this Friday (7th), and was selling for over 2.56 Brazilian reais (R$) as of closing time, the highest value in nine years. The commercial dollar closed the week selling for R$ 2.563, up 0.1%. The price is the highest since April 20th, 2005, when the currency closed at R$ 2.564.
The day was marked by financial market volatility. Early in the morning, the dollar exceeded R$ 2.58, but slowed down in the hours that followed. The US dollar was up 3.42% in November and 8.73% year-to-date.
Over the past few months, uncertainty surrounding the international scenario and presidential elections in Brazil caused the dollar price to soar. Internationally, the Federal Reserve (Fed), the United States’ central bank, eased down on monetary stimuli, causing prices to rocket worldwide. Last week, the Fed ceased to inject dollars into the world economy.
On the domestic front, the dollar went up in the weeks leading up to president Dilma Rousseff’s re-election. On October 27th, the day after the runoff elections, the currency closed at R$ 2.523, which it exceeded on Thursday (6th). On the following days, the US currency oscillated heavily, going up and down, but went back on a steady upward curve on October 31st.
The dollar price did not drop despite the Brazilian Central Bank’s Monetary Policy Committee’s raising of the Selic benchmark interest rate to 11.25% per annum. Theoretically, higher domestic interest rates help bring down the price of the dollar by increasing the difference between the rates in Brazil and the United States, making Brazil more attractive to international investors.
Stocks have gone up this Friday. The São Paulo Stock Exchange’s Ibovespa index closed the day up 1.1%. Petrobras shares went up 1.78% the day after a gas and diesel price increase was announced. Last Thursday, the Ibovespa index had closed down 1.98%.
*Translated by Gabriel Pomerancblum
