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Real and dollar bills exchanged (Shutterstock)
SÃO PAULO – The dollar rate, which was already on the rise due to the coronavirus crisis, gained additional momentum this Friday (24) with the departure of Sergio Moro from the Ministry of Justice. The assessment of analysts and currency traders is that the US currency should continue to appreciate in the short term.
The commercial dollar closed 2.538%, at R $ 5.6653 on purchase and R $ 5.6681 on sale. At the session high, the currency reached R $ 5.7433. The future dollar appreciated 0.87% to R $ 5,586. In the exchange offices, the prices were much higher.
According to the MelhorC Cambio.com website, the price to buy the dollar in cash was R $ 5.87 at the exchange offices in São Paulo, after the market closed this Friday. Previously, the currency in kind was sold for more than R $ 6. As for loading the prepaid card, the price charged at the end of the day was R $ 6.38; in the morning, it reached R $ 6, 91)
In addition to the dollar, the euro also ended the day higher. The advance was 2,471%, to R $ 6.1145 on purchase and R $ 6.1156 on sale. Previously, the walk reached 4%. At the exchange offices, the currency in cash was quoted at R $ 6.28 after the market closed, while the prepaid card in euros was charged at R $ 6.82; in the morning, it was well above R $ 7.
The coronavirus pandemic has triggered a series of measures by central banks around the world to contain the negative economic effects of the outbreak. One of them has been the reduction of interest rates, with the aim of reducing the access of companies and individuals to loans.
Here in Brazil, the basic interest rate, the Selic, has already fallen to 3.75% per year, its lowest historical level, but there is a possibility that it will fall even further. According to the latest Central Bank Focus Bulletin, the market expects interest rates to fall to 3% annually in late 2020.
BC President Roberto Campos Neto said this week that this should happen at the next Copom (Monetary Policy Committee) meeting in early May. He said that the supply of credit from banks began to flow in Brazil.
The lower interest rates in Brazil alienate international investors from the country, who are here taking advantage of higher interest rates than in developed countries, such as the United States. With this outflow of resources, the supply of dollars is reduced and, consequently, the price of the dollar tends to increase.
The political scene also weighs on the dollar. Today, the Minister of Justice, Sergio Moro, announced his resignation when he did not agree with the change of command of the Federal Police requested by President Jair Bolsonaro. He cited “political interference” in the FP and said that institutions must be independent.
“[A saída de Moro] It affects the market in several ways. The first and most obvious is that the market does not like uncertainty. In a normal scenario, the resignation of a minister would already be something that would change the market, ”said Marcelo Giufrida, CEO of Garde Asset Management and former president of Anbima.
“But in the current context it is worse. The president is already highly criticized, there was the departure of [ex-ministro da Saúde, Luiz Henrique] Mandetta, there was the so-called “Marshall Plan” with clear indications that the economic team did not participate or validate, the moment is bad, “he added.
Fabrizio Velloni, head of the Front Corretora reception, said that the increase in the dollar against the real is more intense than the appreciation against other emerging currencies due to the political crisis in Brazil. “This was already happening after Mandetta left, and now it got worse when Moro left,” he said.
“It is the ghost of some type of impeachment request, jeopardizing the mandate of President Jair Bolsonaro. The market ends up valuing this and withdrawing. The outflow of resources from the country is now very large and we do not have a short-term forecast to return this capital, ”he said.
Transfers to Brazil are growing
While lower interest rates and the political crisis scare away Brazil’s foreign investors, Brazilians with money abroad rush to transfer funds to the country, thus taking advantage of the stressed exchange rate to reap the benefits of the conversion.
“Since the coronavirus crisis caused a great loss of papers abroad, since March, at the Front, we have been working as an option for Brazilians with resources abroad to repatriate this money in Brazil, earning in return. There was a great flow of clients that took advantage of this, ”said Velloni.
According to the Central Bank, in the first quarter of 2020, US $ 821 million in transfers from individuals entered Brazil, an increase of 18.5% compared to the same period last year. In March alone, it was $ 290 million, an increase of 1.4%.
At Travelex Bank, which is part of the Top 5 in international transfers from the Central Bank, the increase in money repatriation transactions was 22.3% in the first quarter of this year. In March alone, progress at the institution was 30.8%.
“The change in the level of the real against other currencies, especially the dollar, greatly favored the entry of funds into the country. The real depreciated about 14% against the dollar in the first quarter of 2020, compared to the first quarter of 2019. With that, those who had money abroad for investments, for example, had the opportunity to convert these values in reais with this gain. conversion, ”said executive superintendent Jorge Arbex of the Travelex Confidence group.
“In addition, many Brazilians living abroad send money both to relatives here in Brazil and to the commitments they still have in the country. The dollars they sent today are worth 14% more real than a year ago, “he added.
TransferWise observed the same, and the volume of transfers to Brazil increased by 50% in March, compared to the same period in 2019. It was a record volume since the company began operating in the country, in 2016. The company without However, it does not open the exact amount of money repatriated.
“The favorable appointment undoubtedly benefited Brazilian and foreign expatriates who need to send money to Brazil, which was reflected in this new record of volumes marketed by our platform,” Heloisa Sirota, general manager of TransferWise in Brazil, said in a note. Globally, TransferWise moves $ 5 billion a month.
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