O dollar fell on Monday, with the real spearheading gains in markets global exchange, amid reports that the government had reached an agreement with the Congress on the controversial Budget approved by the Legislative, while abroad coins profile similar to the real were valued.
As one source told the Reuters, the government’s economic area and Congressional leaders reached a consensus on the need for changes to the Budget approved for 2021, and the agreement points to a review of spending assumptions and a reduction in half of parliamentary amendments.
The source considered, however, that the negotiations on the adjustments to the Budget should last for a few more days and “only with luck” the necessary changes would be concluded by the end of next week.
The Budget endorsed by parliamentarians two weeks ago caused an uproar in the market for, in the evaluations of analysts and members of the government itself, bringing unrealistic estimates of expenses and revenues and the robust volume of parliamentary amendments, which increased the risk premiums of financial assets locations.
The malaise left President Jair Bolsonaro between the economic team and Congress and brought back to the radar debate about the permanence of the Minister of Economy, Paulo Guedes, who classified the piece as “unenforceable”.
“I think that, with this (the supposed agreement), the issue of Paulo Guedes’ departure has lost a lot of traction”, said Roberto Motta, responsible for the derivative table at Genial Investimentos, according to which, with the rumors surrounding the minister’s departure spreading, foreigners bought 76 thousand dollar futures contracts in the local market between Wednesday and Thursday.
“But if the hole-in-the-roof gang gains importance, earns more money, maybe I won’t rule out Paulo Guedes’s departure. (…) We will live with these comings and goings from here until the elections (2022) ”, he added.
The market awaits statements by Paulo Guedes from 3:30 pm on Monday, in a virtual event promoted by XP and, this morning, analyzed speeches by the president of the central bank, Roberto Campos Neto, to the newspaper O Estado de S. Paulo.
Campos Neto reinforced that the Central Bank is concerned with public accounts, said that the Budget may increase fiscal risk and hinder monetary policy and reaffirmed that the municipality does not have an interest policy by looking at the exchange rate.
Some in the market understood that, with an additional concern for the Central Bank (the Budget), there is a risk of further impact on inflation, which would lead the Central Bank to raise interest rates beyond what it has indicated.
The spot dollar fell 1.03% to 5.6565 reais at 9:39 am.
Not foreign, or the dollar fell between 0.3% and 0.7% against the Mexican peso, South African rand, Turkish lira and Chilean peso.
The climate in general is positive abroad, with the futures of stock exchanges in Wall Street pointing to new records on the way, after strong US employment data released last week support readings that the economy American economy is in full recovery.
(Updated at 10:09 am)
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