forex newsBRAZIL: DI Rates Close Higher With Fears Related To Draft Budget, USD

BRAZIL: DI Rates Close Higher With Fears Related To Draft Budget, USD

The one-day interbank deposit futures rates (DI rates) in Brazil closed higher Thursday, tracking the rise of the locally traded U.S. dollar amid worries related to the draft budget approved by the South American country’s Congress.

Overnight, the Brazilian Congress approved the draft budget, but remove the prohibition to wage increases for public servers, as well as the creation of positions next year.

The January 2019 DI contract rate closed at 6.88%, from 6.84% in the previous settlement, while the January 2020 DI rate was at 8.32, from 8.21%. The January 2021 DI contract rate settled at 9.31, from 9.19%.

According to Rafael Passos, an economist at Guide Investimentos, the “worsening of the Brazilian fiscal framework is a reality and the draft budget did not please investors.”

“It is a sum of uncertainties and negative outlook that caused the market to price such rates. Besides volatility, it was a very punctual thing with the interest rate curve and with the exchange rate, different from the external movement,” said Haitong’s economist Flavio Serrano.

The material has been provided by InstaForex Company –

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