The Brazilian real opened lower against the US dollar on Wednesday, with the dollar down 0.19 percent at R$ 5.5752 around 9:14am. Investors focused on the government’s fiscal adjustment measures and on Petrobras’s quarterly profit.
Fiscal package in focus
Government and Senate negotiators are working on a package of measures to improve public accounts. The proposal was expected to be presented by allied senators during the week. The package could affect accounts in 2027 by up to 80 billion reais.
Gabriel Galípolo, president of the Banco Central do Brasil, said on Tuesday that long-term interest rates are shaped by confidence in public accounts and by the risk of real devaluation. Investors are watching how far the package will go.
Central bank holds its line
The central bank kept the Selic rate at 13.75 percent per year at its latest Copom meeting, ending a cycle of five consecutive cuts. The minutes said that with expectations unanchored, greater monetary restriction for longer was required.
The bank also said inflation expectations rose in recent weeks and remain above target.
Petrobras profit rises
Petrobras reported a third-quarter net profit of 39.75 billion reais, up 21.5 percent from the same period a year earlier.
US consumer prices rose 0.4 percent in October, against a market expectation of 0.3 percent. Markets in the United States were closed for the Veterans Day holiday.
Source: Petrobras
