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Finance Minister Haddad Announces BRL 15bn Spending Freeze

BRAZIL
  • Finance Minister Haddad said yesterday that the government will freeze BRL 15bn in spending from this year’s budget to help it meet its fiscal target. The announcement came late in the day after a meeting with President Lula and Planning Minister Simone Tebet, prompting a dip in USDBRL from 5.577 to close at 5.5445, leaving the pair 1.13% higher on the day. The freeze was due to be announced in the bimonthly Treasury report on Monday, but was brought forward to ease market concerns.
  • Meanwhile, Economic Policy Secretary at the Finance Ministry Guilherme Mello said it was still possible to revise 2024 GDP upwards after the estimate was kept unchanged at 2.5% in yesterday’s July Macro-fiscal bulletin. The government has given all indication of its commitment to fiscal matters, he said, adding that the new fiscal measures will allow the FX rate to return to a level close to that of April.
  • Today, BCB President Campos Neto will have internal meetings in Miami, while Finance Minister Haddad will attend the National Industry Forum meeting in Sao Paulo at 1500BST(1000ET). No macro data are due today, with attention on Monday’s bimonthly Treasury report.

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