# Brazilian stocks, currency fall as tax hikes spook investors - Markets - Business Recorder

> Brazilian equities and the real fell on Tuesday after the government raised taxes on banks and the chemical industry and cut them on diesel and cooking gas. The dollar rose about 2% against the real, reaching a three-month low for the currency despite a $1 billion central bank spot sale. The Bovespa index fell as much as 2.7% intraday before recovering to a 1.3% loss by midday.

- Date: 2021-03-02 · published 2021-03-02T12:00:00.000Z
- Category: policy · region Brazil · magnitude medium
- Page: https://feedsoft.ai/events/12206-brazilian-stocks-currency-fall-as-tax-hikes-spook-investors-markets-business
- Commodities: [Brazilian Real (BRL per USD)](https://feedsoft.ai/c/USDBRL.md), [ULSD / Diesel](https://feedsoft.ai/c/DIESEL.md)

## Why it matters

The tax changes raised doubts about Brazil's fiscal and economic direction, which pushed the real weaker and makes Brazilian exports cheaper in dollar terms. A cheaper real can support export selling of soy and corn, while the diesel tax cut lowers fuel costs for farm and freight operations.

## Read by commodity

- DIESEL: bearish ▼
- USDBRL: bullish ▲

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDBRL | 2021-03-04 | 1 | -3.3% | -3.0 | Tax changes (hikes on banks and chemicals, cuts on diesel and cooking gas) raised fiscal concerns and triggered real weakness and equity selling, contributing to the depreciation momentum, but the event is dated two days before the move. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDBRL | 2024-11-29 | [Brazil's finance minister, Congress leaders seek to calm markets on tax change concerns](https://feedsoft.ai/events/12460-brazil-s-finance-minister-congress-leaders-seek-to-calm-markets-on-tax-change.md) | +1.7% | +5.6% |
| USDBRL | 2021-07-07 | [Brazilian Real Stalls on Plans for Dividend Tax Hike, Finds Support on Data](https://feedsoft.ai/events/9911-brazilian-real-stalls-on-plans-for-dividend-tax-hike-finds-support-on-data.md) | -0.5% | +1.1% |
| USDBRL | 2024-11-28 | [(USD BRL) Brazil’s Real Drops to All-Time Low as Spending Cuts Fall Flat - Bloomberg](https://feedsoft.ai/events/12461-usd-brl-brazil-s-real-drops-to-all-time-low-as-spending-cuts-fall-flat-bloomberg.md) | +1.7% | +5.6% |
| USDBRL | 2017-05-19 | [For These Die-Hard Investors, Now Is the Time to Buy Brazil - Bloomberg](https://feedsoft.ai/events/4357-for-these-die-hard-investors-now-is-the-time-to-buy-brazil-bloomberg.md) | -2.8% | -2.7% |
| USDBRL | 2017-05-18 | [Brazil Real Plunges Against Dollar After Report President Temer Encouraged Bribes \| Fox Business](https://feedsoft.ai/events/4358-brazil-real-plunges-against-dollar-after-report-president-temer-encouraged.md) | +5.6% | +5.6% |
| DIESEL | 2024-08-29 | [Shifting incentives bring uncertainty, limit liquidity in spot California R99
markets \| Argus Media](https://feedsoft.ai/events/29003-shifting-incentives-bring-uncertainty-limit-liquidity-in-spot-california-r99.md) | -2.8% | -4.1% |
| DIESEL | 2018-10-19 | [Refiners Slump as Trump Looks to Slow-Roll IMO Fuel Mandate - TT](https://feedsoft.ai/events/12175-refiners-slump-as-trump-looks-to-slow-roll-imo-fuel-mandate-tt.md) | -0.9% | -9.6% |
| DIESEL | 2022-03-31 | [Opec+ sticks to output rise plans for May as US announces release of record oil reserves \| The National](https://feedsoft.ai/events/42176-opec-sticks-to-output-rise-plans-for-may-as-us-announces-release-of-record-oil.md) | -8.3% | +34.5% |

## Sources

- brecorder.com: https://www.brecorder.com/news/40069498

---
Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.