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Learn how the Central Bank's interventions reflect the crisis of confidence in the market
Em 2024, central bank Brazil faced one of its greatest challenges in trying to stabilize the saving from the country. With the dollar surpassing the mark of R$6,19, the institution was forced to burn about $ 190 billion in international reserves in a few days. However, these interventions were not enough to stop the rise of the US currency, showing a crisis of confidence in the financial market.
Why did the Central Bank need to intervene?
The main motivation for the Central Bank's actions was to contain the exchange rate volatility and avoid even more severe impacts on inflation and the cost of living of the population. However, the reasons that led to this crisis go beyond the external scenario.
Internal factors, such as the fiscal imbalance, high public spending and controversial statements by the government contributed significantly to the lack of confidence in the markets. National and foreign investors began to withdraw resources from the country, accelerating the devaluation of the Real and putting even more pressure on international reserves.
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The impacts of interventions
Despite the efforts of the central bank, sale of dollars in the market did not have the expected effects. The Brazilian currency quickly returned to previous levels, while international reserves suffered a significant reduction. This raised concerns about Brazil's ability to deal with future crises, given that reserves are one of the main instruments for stabilizing the saving in times of turbulence.
Furthermore, the reserve burn has had a limited impact on investor perception. Without a clear strategy to address structural problems, interventions are seen as short-term solutions that do not address the root causes of the crisis.
Crisis of confidence and capital flight
The lack of economic planning and contradictory statements from the government contributed to the flight of investors from Brazil. The outflow of capital not only puts pressure on the Brazilian currency, but it also aggravates the fiscal imbalance, making it more difficult for the country to attract new investment.
Investors are looking for stable and predictable economies, which Brazil currently cannot offer. This situation creates a vicious cycle: distrust leads to capital flight, which in turn increases economic instability.
What to expect for 2025?
With an pre-election year on the horizon, the prospects for 2025 are uncertain. Experts fear that the government will increase public spending for electoral purposes, further worsening the fiscal imbalance. In this scenario, the pressure on the central bank should continue, with possible new dollar auctions to try to contain exchange rate volatility.
To reverse this situation, it will be necessary to adopt structural measures, such as cost reduction, improving communication with the markets and ensuring the independence of the Central Bank. Without these actions, Brazil will continue to face difficulties in stabilizing their saving.
The crisis faced by central bank em 2024 is a direct reflection of structural problems in Brazilian economy. Burning international reserves, although necessary in times of emergency, is not a sustainable solution to resolve the crisis of confidence. The future will depend on concrete and structural measures to restore economic stability and investor confidence.
This misdirection is regrettable, caused by incompetence and disrespect for public money, two unavoidable commitments of this bad government.
Fear of military service is just weak!!!#
THEY ARE CHANGING UNDERWEAR EVERY DAY.
Campos Neto
Boksonarist
Vomit and ENJOY 💸🐁
BoZos comedies.
Get out of there, you little street, your president is destroying Brazil, you bunch of ****
You're going to miss **** next year, huh...
You are a poor lost thing,
In the illusion of your president,
I already said that Brazil has more than 80% of stupid people...
Said everything.
Apparently you are contributing to the increase of this percentage. And you are still rude.
When Campos Neto leaves this month, the left will lose an expiatory **** to transfer the blame lol
All that's left is to blame the opposition in Congress, blame the press and blame those who make memes on the internet lol
He did the damage in these 4 years. It will take time to recover. Another one to be investigated.
You will only be satisfied when you have more to eat.
Learn to write ****.
We will still miss Campos Neto, without a doubt the best and most competent of the BACEN presidents since the redemocratization. That is for those who know something, even basic, about economics.
Do you know?????
THIS. ALL IS A CONSEQUENCE OF A COUNTRY THAT IS BADLY GOVERNED BECAUSE IT IS IN THE HANDS OF A ****
Uffff
It analyzes how many interventions were made between 2019 and 2022 and how much was consumed from international reserves.
Misgovernment? Is the BC run by the central government? Where is the BC's independence with 12% interest rates in SELIC?
The government has already gone overboard with public spending, if it continues with unbridled spending, the situation will only get worse, with the dollar rising higher and higher, leading the country to decline, where is the STF to curb this spending?
Patriots don't need to travel to Uncle San's land to argue anything about Brazil
So, you who are a patriot, talk to your political base to reduce spending on amendments in Congress and on trips to the US and Ukraine. Let's end the privileges of the military... Let's work to end SUPER SALARIES and finally, let's fight to reduce these abusive and inexplicable interest rates from the Central Bank. Let's go patriots...?
So start cutting expenses of your president who spends and wastes. Now you want to hold a tiny government accountable. It has no bench and buys Congress with amendments to approve dubious agendas. And worse. Lula is sponsoring 16 for artists under the Rouanet law, a 1.5 billion plane, unnecessary renovations to the palace and details with confidentiality of expenses. Janja Palooze, international trips of your gigantic ministry, the daughter of the payment of your gigantic ministry, the largest in history. And you are blaming the salaries of military personnel. Don't talk nonsense, boy. Go study better. Lula is an incompetent like Haddad in the past. He sank the country under Dilma's administration and is doing the same.
Is this what you mean by “public spending”?
For the cliché content of zap and oeste. It's explained!!
We have the lowest unemployment rate since 2012, the GDP is growing every day, Brazil is doing well, despite the market and traditional media playing against it…
Paraphrasing Maria da Conceição Tavares, an economist from the PT itself, “the people do not eat GDP”. It is more realistic to see that your salary buys less and less products at the supermarket.
But in supermarkets that's not exactly what we see, employment without salary values doesn't solve much, my friend, you talk about unemployment but forget to say that the dollar has soared like never before in the history of this country and this flattens salaries.
️
Are you living in Denmark?
Ha! Ha! Guys!!! Are you sure what you're talking about?
I stopped at the Rouanet Law. If the guy considers the law to be public spending, it's because he doesn't understand anything about the subject.
20% imbecile/criminals 78% dumb/good citizen
12% are left who are smart and very well educated.
Let's suppose that 6 of these 12 are bad, the rest are good, and for one to win it is enough for the other to do nothing.
Now, who do you think wins?
Unexplained interest? Hahaha
The day a firm guy appears and with a club on the table says I will not pay this debt anymore and kicks this cancer as the main currency, the dollar, of the Brazilian economy, the country will straighten up, and without dogmas from the right that does not think and the left, that burned the rest of its brain, on marijuana, the country is melting and is on the verge of recession. At a cost of R$ 32000,00 per second of the people only with a 1% variation in the Selic rate.
Smile, we are already reaching the mark of R$1 trillion reais in debt, now prepare your wallets, all Brazilians pay the bill.
The STF is too busy trying to argue for Bolsonaro's arrest. They are simply campaign workers for Lula's asshole. They have no further use in this country beyond this.
I HAVE NEVER SEEN A **** BE A GOOD ADMINISTRATOR, ALL LEFTISTS IN THE END ALWAYS BROKE THEIR COUNTRY.
Wow, **** Portuguese. Never come? Come from where? Or would it be never seen? And that agreement all **** always breaks at the end, or would it be break?
At times like these, the STF doesn't even care, it only cares if Bolsonaro did the same thing that Lula is doing now. Something that Bolsonaro wouldn't do, I'm sure of it, the STF would blame him as it always has.
Who didn't do the jewelry ****? The one who gave money in gold bars to pastors **** via the MEC? I know... Very honest. A **** who buys 51 properties with cash, honestly...
Bolsonaro was an extra for the president, he never did anything other than clown around on his motorcycle, ride jet skis and do live shows without the slightest idea. The Ipiranga gas station was the one giving orders and Lira controlled the secret budget and political articulation.
What do you understand by “public spending”?
All evil undoubtedly comes from the **** era of Bolsonaro and his **** of miserable deadbeats.
Inheritance is written with H ****
This crazy idea is definitely not yours. Usually, great ideas have a thought behind them.
No one better than the president of the central bank to calm the market.
But on the contrary, he wants to see the circus burn down. Perhaps for hidden interests.
You're talking 💩 no, it's the president of the Central Bank who decides, if you really understood what you're talking about you would know that only Copom and a committee decide, the president only puts the issue on the agenda for the team there and Lula, he's the one who has to spend less and that's why there are interest rates, this generates distrust in investors of default, that's why interest rates work as a guarantee of payment of the Selic and that's why don't talk about it 💩 please
The Central Bank is just trying to put out the fires that this misgovernment is causing. It has to raise interest rates to prevent further investment flight.
These burnings of reserves to try to reduce the rise of the dollar are useless, because the root of the problem is not being resolved and the money is going down the drain.