Weekly Report - 05 March 2015 (WR-15-09)

On 4 March, one US dollar was briefly worth just over R$3, putting the Brazilian currency at its weakest level for over 10 years. The Real’s fall in value was attributed to the decision by the senate president, Renan Calheiros, to block the government’s attempt to pass a tax-raising bill (see previous piece). Speaking to the daily O Globo, the economist Rodolfo Oliveira said, “the government is going to have difficulty making its fiscal adjustment and there will be political barriers in the way.” While the Real was already weakening against the dollar, due to Brazil’s deteriorating economic situation, political uncertainty is now undermining it yet further.