The June meeting of the National Monetary Council, which will review the inflation target and set a new one for 2026, is more important for the Real exchange rate than today's inflation figures.

Possible attempts by the government to influence the hawkish monetary policy in a more dovish direction via the inflation target or the appointment of new BCB directors, also due in June, remain the biggest risks for the BRL. However, we will only know whether and to what extent such concerns are justified at the first interest rate decision after the National Monetary Council meeting and with the participation of the new directors, probably in August.