The Brazilian real closed this Monday with a slight appreciation of 0.22% against the dollar thanks to a new intervention by the Central Bank to defend the currency, but it accumulated a depreciation of 27.35% in 2024, its biggest drop since 2020, when the economy was hit by the pandemic.
In the exchange market, The Brazilian currency closed on the last trading day of the year with a price of 6.1787 reais. per dollar for both sale and purchase, with a slight appreciation compared to Friday thanks to the fact that the Central Bank auctioned 1,815 million dollars to try to stop the devaluation.
Before the Issuer’s intervention, the US currency was sold at 6.24 reais.
The depreciation of the real in 2024 was the largest since 2020 (-29.33%), when the currency felt the negative effects of the stoppage of activities caused by the Covid pandemic, and the second highest since 2015 (-48.3%), when, in the midst of the political crisis that ended with the dismissal of President Dilma Rousseff, Brazil suffered two years of recession.
According to the consulting firm Austin Rating, with a depreciation of 27.35% in 2024, The real was the currency that lost the most value this year among those of the G20 countries (largest economies in the world) and the sixth in the world, only surpassed by South Sudan (-72%), Ethiopia (-56.5%), Nigeria (-41.7%), Egypt (-39.2%) and Venezuela ( -30.8%), highlighted EFE.
Brazil began 2024 with a price of 4.85 reais per dollar which maintained much of the year, since the strongest depreciation was recorded in November and December due to the doubts among investors about the ability of the Government of President Luiz Inácio Lula da Silva to reduce the already worrying fiscal deficits and public debt.
In 2024, it was the first time in Brazil that the exchange rate exceeded the bar of 6 reais per dollar, which occurred on November 29.
The exchange rate reached a record of 6.27 reais per dollar at the close of December 18, when the Brazilian currency reached its historic low, but fell in the last two weeks of the year thanks to the interventions of the Central Bank.
Sales for US$33,000 million in December alone
With the 1,815 million dollars auctioned this Monday, the total reserves auctioned by the Issuer in December rose to nearly 33,000 million dollars to try to stop the depreciation of the currency.
The fall of the real is attributed by operators to the distrust of investors in the fiscal policy of the Lula Government, who, since taking office in January 2022, has promised to reduce Brazil’s primary fiscal deficit to zero and has so far failed to do so.
Ten days ago, Congress approved a set of fiscal adjustment measures presented by the Government and with which the Ministry of Finance plans to reach zero deficit in two years, but investors considered it insufficient.
According to a report released this Monday by the Central Bank, The year-on-year deficit in public accounts until November rose to the equivalent of 9.50% of Brazil’s gross domestic product (GDP).
According to the issuing institute, the negative balance in the nominal result of the public sector, which includes the payment of interest on the debt, stood at 1.11 trillion reais (180,064 million dollars or 170,923 million euros) in November. ).
Another indicator that arouses distrust among investors is that of public debt, which, according to statistics released today, rose in November to 9.01 trillion reais (about 1.46 trillion dollars), the equivalent of 77.7 % of GDP, almost four percentage points more than December 2023 (73.8% of GDP).
Source: Ambito
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