End-of-Year Forex Stays Stable for Brazil Despite U.S. Elections
By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The volatility seen in financial markets this past week due to the upcoming United States Presidential elections on Tuesday, November 8th, is expected to continue until a winner of the highest position in U.S. government is announced. The forecast for the foreign exchange rate in Brazil at the end of the year, however, has not changed.
Financial institutions surveyed for the Central Bank’s Focus Survey calling for the rate to close at R$3.20/US$1 at the end of this year and R$3.39/US$1 at the end of 2017. They also maintained the projection for inflation measured by IPCA index at 6.88 percent this year, according to the weekly Central Bank Focus Survey. For 2017, the estimate for inflation fell from five percent to 4.94 percent.
The latest forecast continues above the target established by the government for this year of 4.50 percent as well as the target ceiling of 6.50 percent. For 2017, the Central Bank maintained the target center at 4.5 percent by reducing the target ceiling to six percent. The latest result, however, is the first time the IPCA forecast for next year falls below five percent since October of 2015.
Forecasts for the country’s Gross Domestic Product (GDP) for this year continued to decline, going from a retraction of 3.30 percent to 3.31 percent. Financial analysts were also more pessimistic with next year’s GDP increase, decreasing their forecast from a growth of 1.21 percent to 1.20 percent.
The latest survey also showed that the forecast for the Selic (annual benchmark interest rate) at the end of the year continues at 13.50 percent. Currently, the Selic rate is at fourteen percent per year. For the end of 2017, the rate expectation is of 10.75 percent, a sign that financial analysts believe that the economy will slowly improve next year.
The Focus Report is a weekly survey conducted by Brazil’s Central Bank with forecasts from more than one hundred financial institutions.
Live Market IntelligenceBrazil — Live Market Board
Rio Times · Live Market Intelligence
Brazil — Live Market Board
-0.31%
174,598.05
-0.31%
65,580.29
-0.38%
11,457.15
-0.12%
2,986,788
-0.48%
2,481.47
-0.33%
60,779.49
-1.23%
| Instrument | Last | Change | YoY | Prev. | High | Low | Volume |
|---|---|---|---|---|---|---|---|
| IBOV | 174,598.05 | -0.31% | +21.85% | 175,135.41 | 168,310 | 167,142 | — |
| USD/BRL | 5.16 | +0.01% | -5.13% | 5.16 | 5.18 | 5.14 | — |
| SELIC | 14.00% | — | — | — | — | — | |
| PETR4 | 41.64 | -0.05% | +35.19% | 41.66 | 41.97 | 41.15 | 41,499,400 |
| VALE3 | 72.97 | +0.83% | +30.75% | 72.37 | 73.54 | 72.66 | 17,658,000 |
| ITUB4 | 38.60 | -1.03% | +4.57% | 39.00 | 39.34 | 38.39 | 29,487,800 |
| BBDC4 | 16.85 | +0.36% | +3.50% | 16.79 | 16.90 | 16.67 | 19,416,900 |
| BBAS3 | 19.37 | +0.47% | +0.73% | 19.28 | 19.44 | 19.16 | 11,069,200 |
| B3SA3 | 14.26 | -0.21% | +12.73% | 14.29 | 14.47 | 14.11 | 33,037,800 |
| ABEV3 | 14.89 | -0.80% | +21.91% | 15.01 | 15.07 | 14.81 | 16,453,100 |
| WEGE3 | 47.59 | +0.49% | +29.99% | 47.36 | 48.08 | 47.36 | 3,364,600 |
| PRIO3 | 59.14 | -0.19% | +50.67% | 59.25 | 59.81 | 58.74 | 3,325,600 |
| SUZB3 | 41.33 | +2.35% | -23.55% | 40.38 | 41.48 | 40.35 | 3,914,900 |
| RENT3 | 34.68 | -0.09% | +0.84% | 34.71 | 34.96 | 34.35 | 7,979,100 |
| AZZA3 | 15.89 | -2.63% | -53.76% | 16.32 | 16.42 | 15.82 | 1,330,300 |
| CSNA3 | 4.30 | +0.47% | -42.65% | 4.28 | 4.41 | 4.26 | 10,076,100 |
| GGBR4 | 24.69 | +2.19% | +51.38% | 24.16 | 24.85 | 24.18 | 7,047,600 |
| ENEV3 | 24.21 | -1.38% | +70.49% | 24.55 | 24.64 | 23.99 | 9,297,000 |
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