Haddad attributes ‘two thirds’ of the dollar’s rise to the external scenario – 04/16/2024 – Market

The Minister of Finance, Fernando Haddad, attributed “two thirds” of the rise in the dollar to the external scenario. This Tuesday, the American currency reached R$5.28, the highest value in more than a year.

The spike comes one day after the government confirmed the revision of the fiscal target for next year, from a surplus of 0.5% to zero.

“I am obviously following what is happening with the Treasury and the Central Bank. There is a repricing of assets all over the world. Today, for example, the Mexican peso is suffering more than the Brazilian real. Indonesia too”, he told journalists in Washington (USA), where he arrived this Tuesday morning to participate in meetings of the IMF, World Bank and G20.

Haddad attributed the turbulent scenario to US activity data, such as still persistent inflation, and the conflict in the Middle East and its potential impact on the price of oil.

“There are a lot of things that are making the world pay attention to what is happening in the United States and the dollar is appreciating against other currencies. I would say that this does not explain everything that is happening in Brazil, but it explains two thirds of the that is happening in Brazil”, he stated.

Asked whether the remaining third could be attributed to the revision of the fiscal target, the minister said he believes that “we need to better explain” what will happen to Brazilian public accounts.

“We wanted to bring forward fiscal balance as soon as possible. But we are in a democracy and we are negotiating the measures with Congress,” he said.

Without explicitly mentioning the government’s recent defeats in the Legislature, Haddad stated that the Treasury needs to “negotiate all measures, case by case and, in general, with losses”. “In negotiations, the Treasury always ends up missing out on some part that was important for closing the accounts”, stated the minister.

However, when asked by Folha about his relationship with the president of the Chamber, Arthur Lira (PP-AL), who came into direct confrontation with minister Alexandre Padilha (Institutional Relations), Haddad said that he never had any problems with the deputy and that the two spoke before their trip to the US.

“We learned from March last year to now that not everything that we understand to be fair, that is correct, that goes in the right direction, will be received by Congress with the same sensitivity. This work is being done, it will continue to be done. We have no doubts about the consistency of the trajectories”, said the minister this Tuesday.

Regarding the upward revision of the projection of the basic interest rate, the Selic, by the market, Haddad said that he considers it a natural short-term movement.

“When you have bad news from outside and some internal disturbance, we had the Petrobras episode which has dissipated, we had a discussion about Vale, which is an issue that has been overcome. There were several scratches that caught the market’s attention,” he said.

He reinforced, however, that in his view the fundamentals of the Brazilian economy are better than they were a year ago, both from a revenue and expenditure point of view.

“We will not have the primary expenditure that we had last year. We will not have the primary revenue that we had last year. The revenue will be much better, the expenditure will be much lower”, he stated.