BRASILIA. – The price of the dollar in Brazil continues to rise and marked this Friday a new all-time high by exceeding 6.10 reais, driven by uncertainty around the government’s fiscal commitment Luiz Inácio Lula da Silva. Around 10 o’clock, the dollar was trading with an increase of 1.88%, with a value of 6.1016 reais.
Later, the dollar stopped its rise and began to fall, to 6,015 reais, after the speeches of the presidents of the Senate and the Chamber of Deputies, Rodrigo Pacheco and Arthur Lira, respectively, who reinforced the importance of the adjustment measures presented on Wednesday by the Minister of Economy, Fernando Haddad, although They pointed out a difficult path for the project that exempts from income tax (profits) those who earn up to 5,000 reais (about 840 dollars), the initiative that caused the devaluation.
“The issue of income tax exemption, although it is everyone’s wish, It is not on the agenda for now and can only happen if (and only if) we have the fiscal conditions for it”Pacheco said. Lira added that this project will only be analyzed next year and said that “fiscal responsibility is non-negotiable.”
On Thursday, the North American currency had already broken the 6 reais threshold for the first time in history. According to the Central Bank of Brazil, the dollar closed the day at 5.99 reais, while this Friday it opened again with a bullish trendreaching 6.0245 reais at 9.15 before continuing to rise.
The Real fell again today against the dollarArchive
For its part, the stock index Ibovespathe main one in Brazil, began the day on Friday with a slight drop of 0.22%standing at 124,340 points.
According to the statistical series of the state Institute of Applied Economic Research (IPEA), Since the real entered circulation in 1994, the US currency had never reached 6 reais.
The devaluation of the real It occurred as a result of the announcement of a package of fiscal adjustment measures by the Brazilian government, which seeks to contain public spending and reassure the markets. However, it was received with skepticism by financial analysts, who consider it insufficient to address fiscal imbalances.
The measurement package includes adjustments in salary ceilings and benefits for public employees, as well as in military retirements, with the objective of generate savings of 70 billion reais (almost 12 billion dollars) until 2026. He also proposes tax the highest income sectorsincluding taxes on large assets, inheritances and high-value financial transactions, and contemplates a tax reduction for middle-income citizens.
The measures “consolidate the government’s commitment to the country’s fiscal sustainability” for “a stronger, fairer and more balanced Brazil in the future,” Finance Minister Fernando Haddad said on national television on Wednesday.
But in parallel with the cuts, Haddad announced that he will favor middle-income citizens with a tax reduction – in the so-called income tax – as a counterpart to alleviate the social impact of the adjustment, which generated doubts among investors.
## “Dollar Soars to New Heights in Brazil: What’s fueling the Surge and What’s Next?”
**An Exclusive Interview with Economist Dr. Ana Silva**
**Brasilia** – The Brazilian real has taken another hit, with the dollar reaching a record high of over 6.10 reais earlier today. This latest surge has fueled concerns about the stability of the Brazilian economy and the government’s ability to control inflation.
To understand the factors driving this trend and its potential ramifications, we spoke with renowned economist Dr. Ana Silva, Professor of economics at the University of Sao Paulo.
**World Today News:** Dr. silva, the dollar reached an unprecedented high against the real today. What are the primary factors behind this surge?
**Dr. Silva:** The current rise in the dollar can be attributed to a confluence of factors. **Firstly, there’s a considerable lack of clarity surrounding the Lula management’s fiscal policies.** Investors are apprehensive about the government’s commitment to fiscal discipline, notably regarding its social spending initiatives.
**Secondly, global economic headwinds are playing a role.** The prospect of a global recession and rising interest rates in developed economies are diverting capital away from emerging markets like Brazil. This flight to safety further strengthens the dollar.
**World Today News:** Earlier today, the dollar seemed poised to continue its climb but then reversed course. What caused this sudden shift?
**Dr. Silva:** The partial retreat of the dollar was likely triggered by **statements from key government officials**, perhaps aiming to reassure the market about their commitment to fiscal obligation. However, it remains to be seen whether these assurances will be enough to quell investor concerns in the long term.
**World today News:** What are the potential consequences of this sustained weakening of the real for the Brazilian economy and its citizens?
**dr. Silva:** A weaker real can have both positive and negative consequences.
On the **positive side**, it can boost Brazil’s exports by making them more competitive in the global market.
Though, on the **negative side**, a depreciating currency leads to **higher import prices**, contributing to inflation and potentially eroding consumer purchasing power. This can be particularly detrimental for low-income households who spend a larger proportion of their income on essential goods.
**World Today News:** Looking ahead, what can the Lula administration do to stabilize the exchange rate and restore investor confidence?
**Dr. Silva:** The government needs to take **concrete steps to demonstrate its commitment to fiscal responsibility**.
This involves presenting a clear and credible fiscal plan that outlines enduring spending proposals and debt reduction strategies.
Moreover, the government should actively communicate its policies to the market, fostering **transparency and predictability**.
maintaining a favorable investment climate through **structural reforms** that improve the business habitat can help attract foreign capital and strengthen the real in the long run.
**World Today News:** Thank you, Dr. Silva, for your invaluable insights.
**World Today News will continue to monitor the situation closely and provide updates on the latest developments. **
