Brazil October Trade Deficit Surprises Analysts as Real WeakensAnna Edgerton
Brazil reported a trade deficit last month as oil imports surged, surprising analysts who forecast a surplus. The real depreciated against the U.S. dollar.
Brazil posted a $224 million deficit in October on $22.8 billion in exports and $23 billion in imports, including an 82 percent surge in foreign purchases of oil and derivatives, the Trade Ministry said in a report today. Analysts polled by Bloomberg forecast a $1.2 billion surplus. The real fell 0.8 percent to 2.2568 per dollar at 5:08 p.m. local time.
“The deficit is one factor putting pressure on the real,” Reginaldo Siaca, an exchange manager with Advanced Corretora de Cambio, said about the real’s depreciation. “‘Historically this occurs in Brazil at the end of the year when there’s an increase in people buying dollars.”
Oil imports, which grew last month during refinery maintenance, will slow toward the end of the year on increased domestic production, Foreign Trade Secretary Daniel Godinho told reporters in Brasilia today. Brazil may post a trade surplus in oil in the next two months before the total trade balance improves in 2014, he said.