In January the Brazilian real appreciated against the US dollar from 5.5700 to 5.2915. However, economists at MUFG Bank, expect to see a weakening trend in 2022 despite the positive start.

Recent BRL better performance is poisoned not to be sustained

“We still think BRL trend is to depreciate, driven not only by the expected stronger US dollar with the normalization of the monetary policy in the US, but also by noises coming from the presidential election scheduled to next October and the still delicate fiscal situation that may be jeopardised in an election year.”

“We expect that once this market adjustment is over, BRL might gradually depreciate throughout the remainder of the year, reaching a rate of 5.80 by the end of 2022.”