Financial investments by foreigners in Brazil fall 77% in 2022, to US$ 6.4 billion

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Value includes stocks, mutual funds and fixed income securities. Central Bank cites war in Ukraine, high interest rates in the US and election race as reasons for the fall in values. Foreign investors contributed US$ 6.4 billion in financial investments in Brazil in the year 2022, the Central Bank reported this Thursday (26). The figure represents a drop of 77% in the inflow of resources into the country for investments in stocks, investment funds and fixed income securities compared to the previous year (US$ 27.8 billion). The fall in investments by foreign investors in fixed income securities and shares in Brazil happens despite the fact that the Brazilian economy still registered growth last year. In theory, economic growth favors investments in the Stock Exchange. In 2021, the Gross Domestic Product (GDP) grew by 5%. The official result for 2022 has not yet been released by the Brazilian Institute of Geography and Statistics (IBGE), but the financial market expects an expansion of around 3% in the last year. The retreat also occurred even with the current level of the basic basic interest rate. At 13.75% per year, the Selic is at its highest level in six years. High interest generates a higher return for investors. Scenario in 2022 According to the head of the BC’s Department of Statistics, Fernando Rocha, the result for 2022 is related to the war in Ukraine, the rise in interest rates in the United States and the electoral race. “The impact of the war caused some exits [de recursos do país]and then there was an increase in interest rates in the US [que atraiu recursos]. And throughout the year there were uncertainties in Brazil, as it was also an election year”, evaluated Rocha. He noted, however, that there was an inflow of US$ 4 billion for these financial applications in the month of December alone, showing recovery.

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