Dollar Surge Against Brazilian Real Marks Biggest Annual Gain Since 2020
The US dollar’s value against the Brazilian real skyrocketed in 2024, climbing 27.35% over the year. This surge represents the most significant annual appreciation since the pandemic-induced market turmoil of 2020.
The dollar closed the year’s final trading session at R$ 6.1797, a slight 0.22% dip from the previous day. December saw the dollar gain approximately 3% against the real, despite the Brazilian Central Bank’s market interventions.
The bank conducted nine spot market interventions throughout the month, injecting a total of US$ 21.574 billion. These actions aimed to counterbalance the typical year-end capital outflows.
The last trading day of 2024 witnessed heightened volatility in the currency market. The dollar reached a daily high of R$ 6.2422 before the Central Bank announced a spot dollar auction.
This intervention accepted 14 proposals totaling US$ 1.815 billion, effectively pushing the dollar’s value down for the remainder of the session. Marcos Weigt, Treasury Director at Travelex Bank, explained the day’s fluctuations: “The dollar‘s movement today was largely flow-driven.
Struggles and Outlook for 2025
With very low liquidity, dollar inflows cause the currency to fall, while outflows make it rise.” Weigt anticipates a return to normal market liquidity by mid-January, potentially eliminating the need for further central bank interventions.
The real’s poor performance in 2024 echoes the challenges faced in 2020 when the dollar appreciated by 29.36% against the Brazilian currency. This year’s 27.35% depreciation of the real stands as a stark reminder of the economic hurdles Brazil continues to face.
Despite the Central Bank‘s efforts to stabilize the currency market, the real’s significant depreciation raises questions about Brazil’s economic outlook and monetary policy effectiveness.
The coming year will likely see market participants closely monitoring the Central Bank’s strategies and the government’s economic policies to gauge the real’s future trajectory.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.
Read More from The Rio Times