Overview
- The U.S. dollar ended Friday at R$4.8942 after a 0.59% drop, in the first close below R$4.90 since January 15, 2024 and the lowest level in two years.
- The real’s rally leaves the dollar down more than 10% in 2026 and over 13% in the past 12 months against Brazil’s currency.
- Heavy foreign inflows have supported the move, with overseas investors adding R$54.39 billion to B3 through May 6, reversing 2024’s net outflows; B3 is Brazil’s main stock exchange.
- A stronger real lowers the cost of imports and fuel, which analysts say helps the Central Bank cool inflation by easing pressure on prices.
- Forecasts still flag risk, with the Central Bank’s Focus survey pointing to R$5.25 for end-2026 as rate cuts start to narrow Brazil’s yield advantage, while advisors urge diversified, long-term dollar exposure of roughly 15% to 25%.