The Brazilian real gained today on speculations that the central bank will keep raising interest rates, attracting investors from countries with near-zero interest rates to South American nation’s assets.
Central Bank of Brazil President Alexandre Tombini reiterated this week that he is going to ensure that inflation will slow to the 4.5 percent target. One of the measures to rein inflation is interest rate hikes. It should make real more attractive to carry traders, who borrow in countries with low borrowing costs and then look for economies with high rates of interest to invest into.
USD/BRL slid from 2.3478 to 2.3297 to 2.3264 as of 21:10 GMT today, falling from the intraday high of 2.3573.
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