Reuters. FILE PHOTO: Brazil's Economy Minister Paulo Guedes speaks during a ceremony to launch a program to expand access to credit at the Planalto Palace in Brasilia, Brazil, August 19, 2020. REUTERS/Adriano Machado
BRASILIA (Reuters) - Brazil's real is poised to strengthen against the U.S. dollar, as the country emerges from the difficult and turbulent phase that has contributed to its recent weakness, Economy Minister Paulo Guedes said on Tuesday.
This is normal, the dollar has gone up a little bit now. But the (trade) surplus is very strong, the dollar is going to start to fall. This is normal, Guedes said in congressional testimony when asked about the real's devaluation, adding that it would be great if the dollar fell.
The real lost almost 30% of its value last year as Brazilian interest rates were slashed to a record low 2% in response to the COVID-19-induced recession. It fell a further 10% earlier this year as a deadly second wave hit and investors fretted over the fiscal outlook.
The real has recovered recently and last week traded at 5.34 per dollar, its strongest since early February.