Santander Brasil lowered its estimates to the level of the dollar against the real at the end of 2022, but still sees a second half of the rise of the US currency compared to current levels, with expectations of greater uncertainties in the period.
The bank now sees the dollar at R$5.40 at the end of this year, compared to R$5.70 in the previous projection.
Even lower, the prognosis still included a perspective of nominal appreciation of 5.1% against the rate this Thursday (24), around R$ 5.14.
The new scenario was outlined by the chief economist at Santander in Brazil, Ana Paula Vescovi, and the macroeconomics team.
The bank acknowledges the surprise with the appreciation of the real against the dollar this year, of around 8.4% at current prices, with the Brazilian currency at the top of the list of performances among the main currencies in the period, in the wake of a reallocation of global assets, higher commodity prices, higher domestic interest rates and also constructive market assumptions regarding the political field.
“However, we expect the real to weaken in the second half of 2022 as commodity prices begin to decline, uncertainties surface and the Fed proceeds with quantitative tightening in the US,” they said in a report.
However, the Brazilian currency should regain some momentum in 2023, according to Santander, which sees the resumption of the debate on structural reforms in Brazil from next year onwards, potentially reducing the exchange risk premium.
With this, the bank forecasts a dollar of R$ 5.25 at the end of 2023, a 2.8% drop compared to the estimated closing for 2022. At the margin, however, Santander raised the projection for 2023, since in the previous scenario via exchange rate of R$ 5.20.
The bank also adjusted its interest rate estimates, additionally seeing a last 25 bp hike at the June Copom meeting, in addition to a 100 bp budget for March and 50 bp for May.
As a result, the terminal Selic would be at 12.50%, compared to 12.25% in the previous perspective.
“We only project interest rate cuts in the first quarter of 2023, conditioned on economic policy signals, but this would follow the tightest monetary policy since 2009,” the bank concluded. The Selic is at 10.75% per year.
Source: CNN Brasil
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