Exchange registers the biggest daily retreat since the end of March after the president of the BC of the USA reaffirms the maintenance of monetary stimulus
The main indicators of financial market Brazilians closed in the positive field this Wednesday, 14, influenced by the international good mood. the president of Federal Reserve (Fed), the Central Bank of the United States, Jerome Powell, reaffirmed the maintenance of monetary stimuli, despite the advance of inflation in recent months. In the domestic scenario, the Ministry of Economy raised the expectation of advancing the Gross Domestic Product (GDP) to 5.3% in 2021. dollar closed with a sharp drop of 1.87% — the biggest daily fall since March 31, when it retracted 2.31% —, quoted at R$ 5.084. The exchange rate reached the maximum of R$ 5.157, while the minimum was R$ 5.068. The currency ended the day with a high of 0.13%, quoted at R$ 5.181. Following international optimism, the Ibovespa, a reference on the Brazilian Stock Exchange, closed the day up 0.19%, at 128,406 points, on the third day of positive results. The day’s trading ended up 0.45%, at 128,167 points.
Global markets reacted positively to the speech of the president of the Fed, who reiterated the maintenance of the purchase of government bonds and maintenance of interest rates at minimum levels. The message brought more calm to investors after the jump of 5.4% in inflation measured by the consumer price index (CPI) in June, compared to the same month last year. This was the biggest annual jump in 13 years. In a speech to Congress, Powell said that inflation tends to remain high in the coming months, but that the process is temporary. The head of the monetary authority also said that conditions for job creation are improving, but that “there is still a long way to go”. Investors fear that the signs of economic recovery emitted by high inflation will lead the Fed to reduce its stimulus policy, impacting the pace of economic recovery and the withdrawal of dollars from international markets.
On the domestic front, the Economic Policy Secretariat (SPE) of the Ministry of Economy revised upwards the expectations for GDP and inflation in 2021. The expansion of the economy went from 3.5% to 5.3%. For next year, the economic team slightly raised the forecast to 2.51%, compared to 2.5% in the report published in May. The expectation for 2023 remained at 2.5%. The high was justified by the positive results registered in the first quarter, when the economy advanced by 1.2%, according to the Brazilian Institute of Geography and Statistics (IBGE). For the second quarter, the federal government estimates that GDP will grow 0.25%. To Broad Consumer Price Index (IPCA), the official gauge of Brazilian inflation, the Ministry of Economy projects an increase of 5.9% in 2021. In the Macrofiscal Bulletin released in May, the forecast was 5.05%. The number is above the ceiling of the target pursued by the Central Bank, of 5.25%, with a center of 3.75% and a floor of 2.25%. For 2022, the economic team estimates that inflation will end at 3.5%. The SPE pointed out the strong advance of monitored prices to the overflow of the target ceiling. O Central Bank Economic Activity Index (IBC-Br), considering the preview of the Gross Domestic Product (GDP), retreated 0.43% in May, compared to the previous month, according to data released this Wednesday. In relation to the same month last year, the growth was 14.21%. In the seasonally adjusted series, the indicator totaled 139.11 points. The result came below the one registered in April, when the indicator advanced 0.44% and registered 139.71 points. In the accumulated result for the year, the index grew by 6.6%, while in the last 12 months, the indicator increased by 1.07%. The IBC-Br accumulated a drop of 0.3% in the quarter ended in May, but in parallel with the same period in 2020, it grew by 11.66%.