China News Agency, Sao Paulo, May 7 (Reporter Mo Chengxiong) The Brazilian central bank's interest rate cuts continue to push the dollar stronger. On the 7th local time, the exchange rate of the Brazilian dollar against the Brazilian real rose by 2.51%, rising above the 5.80 mark for the first time. .
On the evening of the 6th, the Brazilian central bank announced a 75 basis point rate cut and lowered the benchmark interest rate from 3.75% to 3%, reaching the lowest level in history. On the day of the interest rate cut, the exchange rate of the US dollar against the Brazilian real rose by 1.96% in response to the closing price of 1 US dollar to 5.7030 real, setting a new record for the closing of the US dollar.
After the market opened on the 7th, the dollar exchange rate in the Brazilian market continued to rise strongly, closing at 1 U.S. dollar to 5.8459 reais, a record high. The highest exchange rate of the US dollar on the same day touched the exchange rate of USD 1.8763 for 1 USD, while the closing price of tourism USD reached USD 6.0535 for 1 USD, exceeding the 6.0 mark for the first time. The exchange rate of the US dollar against the real was up 4.84% this week. Since this year, the US dollar has appreciated by 42.23%.
On that day, the Brazilian stock market fell. The São Paulo Stock Exchange ’s Ibovispar Index fell 1.2% to close at 78119 points.
Industry insiders said that due to the new coronary pneumonia epidemic, Brazil's economy will decline by 3.76% this year. This is after the economy fell by 3.5% and 3.3% in 2015 and 2016, respectively. To stimulate economic growth, the Brazilian Central Bank is expected to implement interest rate cuts again in mid-June this year. However, the interest rate cut will also cause the outflow of Brazilian funds, damage Brazil's competitiveness, and increase the pressure on the local currency real. In the long run, this will make the US dollar stronger and accelerate the depreciation of the real, which is not conducive to Brazil's overall economic recovery. (Finish)