In 2021, according to a survey carried out by the risk rating agency Austin Rating, the AReal is the fourth currency that appreciated the most globally. This appreciation caused the dollar to close at less than R$5 for the first time in more than a year.
Compared to other currencies, the Real had a gain equivalent to 3.6% in proportion to the dollar. The Brazilian currency appreciated more than the currencies of world economic powers such as Canada, the United Kingdom and Russia.
The increase in the interest rate (Selic), from 3.5% to 4.25%, is one of the factors for the appreciation of the real. Due to the country’s increase in interest, investments made in Reals have a higher return, which makes the country more attractive to foreign investors.
The growing rate of vaccination against Covid-19 in Brazil is another factor that contributed to the appreciation of the Real, as it brings better prospects for the economy with the gradual return of commercial activities, generating new jobs and increasing purchasing power in the country.
The Brazilian Gross Domestic Product (GDP) increased by 1.2% in the first quarter of 2021 compared to the same period of the previous year. The investment rate also increased by 3.5 percentage points compared to the same cycle last year, a factor that further provides prospects for the economy to improve.
Read more here: GDP and investment rates grew in the first quarter 2021
Written by Marcos Ferreira, content assistant at Drummond Advisors