The volatility of the Brazilian real is undermining foreign trade forecasts, a Reuters official said
RIO DE JANEIRO (Reuters) – Brazil’s recent exchange rate volatility is hurting the country’s foreign exchange, foreign trade secretary Tatiana Prazeres said on Wednesday.
The Brazilian real closed Wednesday at around 5.52 per greenback, its lowest closing price since January 2022, amid higher US interest rates and local currency uncertainty.
“We have to wait and see where it settles down, the volatility hurts business forecasts,” Prazeres told reporters on the sidelines of an event in Rio de Janeiro.
However, he avoided commenting that the trade balance in 2024 could be worse than expected due to the rise of the US dollar.
In April, Brazil’s Ministry of Industrial Development, Trade and Services lowered its 2024 trade balance projection to a $73.5 billion surplus, from the $94.9 billion surplus it previously forecast.
Prazeres, who works in this department, also said that the Mercosur trade agreement with the European Union is still valid, although there are still problems to be solved in these negotiations.
