Exchange close up with investors fearful of the increase in infections and deaths from Covid-19; BC president says that interest policy does not interfere in the recovery of the economy
The Brazilian financial market fluctuated most of this Thursday, 25, with the worsening of the new coronavirus pandemic, political uncertainties in Brasilia and the message from the president of the central bank, Roberto Campos Neto, that the recent increase in interest rates will not affect the recovery of the Brazilian economy. THE dollar closed with an increase of 0.55%, quoted at R $ 5,670 after reaching the ceiling of R $ 5,682 and hitting a minimum of R $ 5,619. The exchange rate closed the day before with a jump of 2.25%, the biggest daily increase in six months, quoted at R $ 5.640. Despite the mixed scenario in the main international markets, the Ibovespa, a reference from B3, reversed the fall signal in the early afternoon and intensified the gains after Campos Neto’s statements. The session closed with an increase of 1.5%, to 113,749 points. The index closed on Thursday, 24, with a fall of 1.02%, to 112,064 points.
The escalation of the Covid-19 maintains pressure on investors’ mood in view of the prospect of more time for the resumption of economic activities. This Wednesday Brazil surpassed the mark of 300 thousand deaths by the new coronavirus by registering 1,999 new deaths in the last 24 hours. Since February 2020, 330,675 have lost their lives in the country due to the pandemic. The worsening increased pressure in Brasilia. The mayor and ally of Jair Bolsonaro’s government (without a party), Arthur Lira (PP-AL), even cited “fatal remedies” against mistakes made in combating the pandemic. “The political remedies in parliament are known and are all bitter. Some fatalities are often applied when the error spiral becomes a geometrically uncontrollable scale, ”he said, without mentioning the message’s recipient. In the afternoon, the pressure intensified on the departure of Ernesto Araújo from the command of the Itamaraty. After receiving criticism from Lira yesterday evening, this Thursday it was the turn of Senate President Rodrigo Pacheco (DEM-MG) to strike Bolsonaro’s assistant by stating that Brazil needs a “better external representation.”
Also in Brasilia, the president of the Central Bank, Roberto Campos Neto, analyzed the increase of 2% to 2.75% of the Selic rate last week, the first increase in the interest rate in almost six years. “We have described it as a partial adjustment and we have said that the faster adjustment makes us believe that actually doing more, and doing it faster, means that the total intensity should be lower,” he said, in response to analysts who are already waiting for high of 1% at Selic at the next meeting of the Monetary Policy Committee (Copom), between May 4th and 5th. In an audience to address the fight against the pandemic, the Minister of Economy, Paulo Guedes, said this morning that in the coming weeks there will be a different scenario with the advance of vaccination and cooling of social isolation measures. “As Minister Marcelo Queiroga promised, if we have a vaccination rate of one million doses a day, in just over a month we will vaccinate all the elderly. And deaths are 85% concentrated in people over 60 years of age. Even with the new variants, if that age of risk goes down, in 40 days we will have a new scenario, the mortality can collapse ”, he affirmed.