What Can We Expect for the Brazilian Real in 2024?
In this article, we will delve into the sensitivity of the exchange rate to the interest rate differential and what we can expect ahead
Por Eduardo Coccaro, Strategy Analyst
As our readers have seen, we have defended a positive bias for the Brazilian real throughout 2023. Among the factors that should sustain an eventual appreciation of our currency are its imbalance with the broad commodity index over the last four years, as well as its sensitivity to risk appetite in the international market, which has recently improved following disinflationary signs in the US economy.
However, uncertainties in the local scenario, as well as possible surprises coming from the outside should not be ruled out and may weigh on an eventual recovery. Therefore, it is possible to say that the new year will begin with a positive asymmetry in appreciation for the Brazilian real. In this article, we will also focus on one more supporting point for an upward trajectory of the Brazilian currency: the real interest rate differential.