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Focus Remains On Fuel Tax Implementation

BRAZIL
  • Market participants are likely to remain focused on details of government plans to reimpose a tax on fuels, previously cut by ex-President Bolsonaro, and the potential consequences for inflation. Finance Minister Fernando Haddad said Monday after local markets closed that government-controlled Petrobras would contribute to reduce the impact on prices.
  • The final details of the plan are expected to be discussed with President Luis Inacio Lula da Silva today. President Lula meets with Petrobras’s CEO Jean Paul Prates, Finance Minister Fernando Haddad, Chief of Staff Rui Costa and Energy Minister Alexandre Silveira at Presidential Palace this morning.
  • USDBRL has opened a little higher on Tuesday, however, the pair continues to trade within a short-term range between 5.10-5.30. Last trading day of the month and the usual disputes on PTAX fixing is set to add to intraday dynamics.

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