The Minister of Finance, Fernando Haddadcanceled a trip to Europe this week amid prolonged losses in the real and uncertainty about the volume of spending cuts the government is considering.
Haddad postponed the trip, which would have started on Monday (4), at the request of the president Luiz Inácio Lula da Silvaaccording to a statement from the Ministry of Finance this Sunday (3).
The Finance Minister will work in Brasília over the next week, focusing on “domestic issues”, according to the statement. The agenda for the trip to Europe will be resumed “in due course”, he informed.
The real was the worst performing emerging currency on Friday (1), amid concerns about Lula’s commitment to spending cuts and the outcome of the American presidential election.
There were fears that the government could delay the announcement of a cost-cutting package for Haddad’s trip to Europe. The real fell as much as 1.5% against the dollar on Friday, with traders pricing the benchmark Selic rate closer to 14% at the end of the current monetary tightening cycle.
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