For months, Brazilian leaders have thrown almost everything they have in an effort to stop the country’s currency from a precipitous yearlong plunge. But nothing had worked, including hiking its benchmark interest rate above 12%.
Now, as the Brazilian currency, the real, slipped in recent days to its lowest level against the dollar since its introduction in 1994, lawmakers rushed to do something that’s anathema to leftist President Luiz Inácio Lula da Silva: cut government spending.
Da Silva and his leftist allies in Congress have spent lavishly on pensions and social benefits since he defeated the far-right firebrand Jair Bolsonaro in the 2022 election. But worries over Brazil’s soaring deficit have torpedoed the currency of Latin America’s biggest economy, just as this country of more than 200 million faces the prospect of a trade battle with President-elect Donald Trump that could weaken the real further.
h/t Glenn