Brazilian Real Starts To Recuperate As Rate Hike Halt Is Confirmed

Benzinga has been following the saga of the Brazilian Real over the past few days. On Wednesday, the currency hit its lowest point since 2002, closing at 0.2661 U.S. dollars.

On Thursday, the notes continued to fall, with the U.S. Dollar being sold at 3.803 reals -- its highest price in 13 years -- amid speculation about Finance Minister Joaquim Levy being close to stepping down from his position as the discussions about the 2016 budget continue.

However, the Brazilian currency started to recuperate in the afternoon. After rising 0.487 percent, each real is now worth 0.2674 U.S. dollars.

Related Link: Brazilian Real Hits Its Lowest Point Since 2002; Rousseff Assures Fiscal Deficit Is 'Temporary'

While the real is reverting the trend seen in the past few days, the Sao Paulo Stock Exchange continued with the upsurge started on Wednesday. On Thursday, the exchange was up roughly 1.24 percent, to 47,042.33 Bovespa index points.

The Interest Rate Hike Halt

As expected, the Brazilian Central Bank decided on Wednesday to leave its benchmark interest rate untouched at 14.25 percent. Although the interest rate is still considerably high -- especially when compared to other large economies, the non-hike ends with a long cycle of rate increases aimed at battling inflation in the country.

According to the Central Bank, the decision was unanimous, and based on the current macroeconomic situation, the country-specific risk and the inflation outlook.