Haddad: “There is no discussion of changing the exchange rate regime in Brazil or increasing taxes”

The Minister of Finance, Fernando Haddad (PT)stated this Monday (6) that there is no discussion in the government that involves changes to the exchange rate regime or that involves increasing taxes to contain the outflow of dollars from the country.

When asked about this possibility in an interview with journalists, after meeting with the president Luiz Inácio Lula da Silva (PT)Haddad said that the exchange rate tends to settle.

The minister cited the chance that the president-elect of the United States, Donald Trump, would moderate proposals made during the election campaign.

“We had stress at the end of last year, all over the world, we also had stress in Brazil. Just today the president-elect of the United States made statements moderating certain proposals made throughout the campaign. It’s natural for things to settle down,” said Haddad.

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“But there is no discussion of changing the exchange rate regime in Brazil or increasing taxes for this purpose”, he added.

The Brazilian currency underwent strong depreciation at the end of last year, with questions about the government’s fiscal responsibility and the sustainability of public debt, and amid a strong outflow of dollars from the country that led the Central Bank (BC) to intervene in the exchange.

The movement in the domestic market also reflected a global appreciation of the dollar, given the expectation that Trump’s economic policy could have an inflationary effect, justifying higher interest rates in the USA.

This Monday, the dollar fell against the real, in line with the strong losses of the American currency around the world, with investors reacting to news indicating that Trump should adopt a more moderate approach in implementing promised import tariffs.

Around noon, the spot dollar fell 1.2%, to R$6.11.

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Meeting with Lula

Haddad, who suspended his vacation period to return to Brasília, stated that the conversation with Lula dealt with planning for the year and issues related to Congress’s voting agenda, especially the 2025 Budget project.

The minister also stated that he must be informed this Monday by the Federal Revenue Service about the solution of “inconsistencies” in the part of the Income Tax reform proposal that will deal with corporate taxation. He said that the project, still under internal discussion within the government, could be ready this week, but did not specify a date for sending it to the Legislature.

(With Reuters)