Brazil’s real will strengthen and hover above 3 per U.S. dollar as the political crisis engulfing President Dilma Rousseff eases, according to Development, Industry and Trade Minister Armando Monteiro Neto.
The real is the worst-performing major currency this year as Rousseff, weakened by record low popularity, struggles to implement a plan to shore up the country’s fiscal accounts. Moody’s cut Brazil’s sovereign credit rating one level above junk this month, saying debt levels will continue to until the end of Rousseff’s term in 2018.
“The exchange rate will stabilize at a level above 3 or close to that,” Monteiro said during an hour-long interview with Bloomberg at his office in Brasilia. “But all elements lead me to believe we will have a currency that will be friendly to exporters.”
Monteiro expects Brazil to post a trade surplus this year of more than $10 billion, compared with a deficit of $4 billion in 2014. At the start of the year, he predicted a surplus of $5 billion.
The real gained 0.6 percent to 3.4617 per U.S. dollar at 3:22 p.m. local time, paring its decline this year to 23 percent, the biggest fall among 31 most-traded currencies tracked by Bloomberg.