Dollar fall could be interrupted by unfounded tax rumors, says Haddad

The Minister of Finance, Fernando Haddad, said this Thursday that the dollar began a downward trajectory that could be interrupted by a “rumor” that the government could eventually use fiscal space to reduce food prices, which is not true. , according to him.

In an interview with journalists after government meetings on food prices, Haddad stated that there is regulatory space to be explored in the Workers’ Food Program (PAT), citing better regulation of the portability of meal vouchers. He also mentioned prospects for the harvest and the exchange rate.

“The dollar began, in my opinion, a trajectory that could eventually be momentarily interrupted by the rumor: ‘ah, the government is going to use the fiscal space’. There is nothing like that on the horizon, no one is thinking about using fiscal space for this type of thing”, he said.

Read more: Nobody thinks about using fiscal space to reduce food prices, says Haddad

According to the minister, there is no space in the public accounts for measures in this area “and there is no need for fiscal space for this”, highlighting that the solutions to the issue will come from an improvement in the business environment and the country’s external accounts.

“The dollar is falling, this has an immediate impact. Then the person who is long in dollars gets upset that the dollar is falling and makes a rumor, ‘let’s use fiscal space, let’s create something’, there’s nothing like that”, he added.

For Haddad, making financial intermediation cheaper with PAT portability can reduce food prices.

A law passed in September 2022 allows workers to migrate their food stamp credit between suppliers and spend the money at any participating restaurant. But, as Reuters previously reported, the Ministry of Finance and the Central Bank disagree on how to regulate the new system.

In the interview, the minister also highlighted that not all proposals presented by the private sector in this area will be accepted by the government.

The Brazilian exchange market continued this Thursday the recent movement of removing risk premiums from prices, which caused the dollar to close in decline and get closer to 5.90 reais, also helped by the loss of strength of the North currency. American abroad.