Brazil’s real is expected to weaken due to narrowing rate differentials and fiscal concerns amid global energy uncertainties.
Rabobank projects the Brazilian real to depreciate to 5.35 per USD by year-end, citing a narrowing interest-rate gap between Brazil and advanced economies. The forecast also reflects Brazil’s fragile fiscal backdrop and an upcoming election year.
The USD closed last week at BRL 5.0831, marking a 0.56% weekly appreciation for the real, its seventh-best performance among 24 emerging-market currencies. However, persistent global energy risks and elevated US-Iran tensions have kept Brent crude near $100.
Uncertainty in global markets and a potential USD recovery further weigh on the BRL outlook, despite a recent pause in geopolitical hostilities.