HALISTER1: Brazil’s Uncertain Political Backdrop Weighs on BRL: Analysts

Brazil’s Uncertain Political Backdrop Weighs on BRL: Analysts

(Bloomberg) -- The delay of the vote in Brazil’s Senate on a measure that aims to free up 30% of the govt budget is weighing on local assets, analysts say.
  • Lack of quorum to vote on the proposal highlights the difficulties the govt faces with potential reforms, Camila Abdelmalack, chief economist at CM Capital Markets, says in a phone interview
  • “If it is getting a hard time to approve simpler measures, what will happen when it has to go through very necessary but unpopular adjustments like pension reform?”
  • “The market recognizes a certain fiscal lenience and the truce with the government is narrowing,” Eduardo Velho, chief economist at INVX Global Partners, says
  • BCB’s daily auctions of FX reverse swaps are also helping to temper BRL’s ability to follow other EMFX gains, Jayro Rezende, treasurer at Banco da China, says
  • NOTE: BRL little changed after dropping earlier, underperforming most EMFX; DI rates rise
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Camila Abdelmalack (Cm Capital Markets Corretora De Cambio Titulo E Valores Mobiliarios Ltda)
Eduardo Velho (Invx Global Partners)
Jayro Rezende (Bank of China Ltd)

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