Brazil’s Fluctuating Exchange Rate

Just weeks ago, Brazil’s currency looked like it was getting weaker. In early January, the exchange rate was 5.7 reais to 1 dollar. Yet today, it’s down to about 5.1 reais. The big question: what’s in store for Brazil’s future?

Foreign investors need to study Brazil’s exchange rate fluctuations. If you’re in the market to buy a home, for example, it’ll be important to decide when’s the best time to buy. The same goes if you’re selling. Similarly, companies looking to make capital contributions to a business entity also need to consider the exchange rate and timing.

While it’s hard to read the tea leaves, one thing is for certain. Brazil is headed for political chaos, and that’s bound to cause further currency swings.

In October, Brazilians will be voting for their next president. If you thought the last US election was controversial, just wait for this one. The two leading candidates are the current president (who many accuse of being corrupt) and the former president (who served jail time on corruption charges until he was absolved).

Global politics are impacting Brazil’s economy as well. The potential attack by Russia against Ukraine, the COVID-19 pandemic, and numerous other world issues are all factors that, when taken together, influence the exchange rate.

No one can know with certainty what the next few months will bring for the Brazilian economy. There have been and will continue to be ups and downs. But before you invest, at least consider whether now is the right time.