Dollar rises to R$5.65 and long-term rates return to 15% after fiscal package

The dollar closed the week at R$5.65 after the Senate-approved fiscal package disappointed markets. Long-term Brazilian interest rates returned to around 15% by the end of the week.

J.P. Morgan expects the primary balance to improve by R$45 billion to R$54 billion in 2027 but does not expect the 0.5% of GDP target to be met, and it keeps its Selic forecast at 13.75% through 2027.