Question

what is the general assessment of brazils currency risk? Has the risk increased or decreased over the past year? What factors caused this change?

Answer 1

The general assessment of the Brazilian currency risk has been increasing because Brazilian currency has declined substantially in relation to the United States dollars and other major currency of the world because of the political turmoil and lack of growth in the economy of Brazil and there are various internal and social factors which are leading to hampering the overall growth of the economy and that is putting a downward pressure on the exchange rates and has the Brazil Real is expected to fall against the United States dollars.

The risk has increased over the past year because of the uncertainty into the economy and the lack of growth into the economy even after the change of the political regime and it has substantially underperformed the United States dollars.

the recent damage to the performance of the Brazilian currency has been caused due to the coronavirus concern which has led to a fear of recession in the Brazilian economy and the lack of vaccine is also leading to prolonged uncertainty which can dampen the sentiment of the investors.