‘Political noise’ explains the rise of the dollar and prevents the price from falling to R$ 4, says Paulo Guedes | Economy

Economy Minister Paulo Guedes said on Tuesday (14) that the dollar rate should be falling, but that “the political noise” keeps the US currency high.

This Tuesday, the dollar closed the day at a high of 0.65%, quoted at R$ 5.2578. With the result, the North American currency accumulates high of 1.7% in the month and 1.36% in the year.

“That dollar was supposed to be going down, but the political noise won’t let it go down,” he said during an event held by an investment bank in São Paulo.

According to the minister, with the performance of the Brazilian trade balance and the “austerity” of public spending, the exchange rate should be between R$ 3.80 and R$ 4.20.

“The equilibrium exchange rate should be around R$4, R$3.80 today. If everything was normal, R$ 4 — it was between R$ 3.80 and R$ 4.20”, he said.

The minister did not name those responsible for what he called “political noise”. However, he stressed that crises between the Executive and Judiciary Powers are normal and gave examples related to the Supreme Court of the United States.

“This is happening here too. The stick is eating,” he said. “But institutions are evolving.”

In the demonstrations on September 7, President Jair Bolsonaro made threats to the Supreme Court (STF) and even said that he would not comply with judicial decisions of Minister Alexandre de Moraes, which generated negative repercussions in the political and economic world.

However, on Thursday (9) the president released a “Declaration to the Nation”, in which he backed away from the coup threats and denied “intention to attack” Powers.

Last Friday (10), Guedes had said that the “noise about institutions and democracy” of the previous days could affect the economy and cause a slowdown in growth.