Brazil’s foreign trade landscape is grappling with increasing unpredictability due to recent exchange rate fluctuations, according to Tatiana Prazeres, the country’s Foreign Trade Secretary. Speaking at an event in Rio de Janeiro on Wednesday, Prazeres expressed concerns over the Brazilian real’s recent performance, which closed at approximately 5.52 per U.S. dollar—the lowest since January 2022.
The decline in the real’s value is attributed to rising interest rates in the United States and ongoing fiscal uncertainties within Brazil. Prazeres emphasized the impact of this volatility on business operations, stating, “We need to wait and see where it stabilizes; the oscillation harms the predictability of business.”
Despite the concerns, Prazeres refrained from speculating on whether the 2024 trade balance could fall short of expectations due to the strengthening U.S. dollar. This comes after the Ministry of Development, Industry, Trade, and Services downgraded its trade balance projection for 2024 from a $94.9 billion surplus to $73.5 billion in April.
In addition to addressing exchange rate issues, Prazeres commented on the ongoing negotiations between Mercosur and the European Union, affirming that a trade agreement remains feasible. However, she acknowledged that several issues still need to be resolved to finalize the deal.
As Brazil navigates these economic challenges, stakeholders in the foreign trade sector will be closely monitoring the real’s stabilization and its implications for future trade dynamics.
