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BRAZIL: BRL Comes Under Renewed Pressure Ahead Of 2025 Budget Plan

BRAZIL
  • Despite the BCB’s intervention in the spot market today, auctioning $1.5bn for the first time since December 2021, BRL has come under renewed pressure amidst concerns about the 2025 budget plan set to be unveiled later. USDBRL is currently up 0.6% around 5.66, having briefly risen above the 5.69 level in recent trade.
  • According to anonymous sources, the budget plan will not include the structural spending cuts that are being sought by the market nor sufficient new investments wanted by Lula’s party to boost growth. Instead, Haddad is reported to be turning to income measures once again, including a possible hike to taxes on interest on equity to meet the fiscal targets. The budget is set to be delivered to congress later today.

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