Brazilian Finance Minister Fernando Haddad said there will be room for interest rate cuts in the coming months. Speaking at a J. Safra Bank event, Haddad emphasized that the positive trend in the exchange rate strengthens this expectation.
Haddad, who stated at the beginning of the year that he would not accept a limit of 5.70 real for the dollar, reminded that the exchange rate has now fallen to 5.30 levels. Although this situation negatively affects tax revenues, it presents an optimistic picture in terms of the interest rate-exchange rate balance, he stated.The Brazilian Central Bank will announce its new decision on Wednesday after halting interest rate hikes in July. The policy rate is at 15%, its highest level in the last 20 years. Economists expect interest rates to remain stable until the end of the year.
Haddad also said that President Lula da Silva will complete his term, which ends in 2026, with the lowest cumulative inflation in history and that average 3% growth and low unemployment rates will put Brazil in a stronger fiscal position.
