One day after Copom meeting, dollar falls to lowest value in two months.

Wellton Max - Reporter from Agência Brasil

The Central Bank's acceleration in the decline of basic interest rates did not prevent the US dollar from falling again and closing at its lowest value in two months. A day after the Monetary Policy Committee (Copom) meeting that reduced the Selic rate to 13% per year, the commercial dollar closed the session at R$ 3,176, down R$ 0,016 (-0,5%). The exchange rate is at its lowest level since November 8th (R$ 3,167).

The dollar traded lower throughout the session. In the early afternoon, it briefly stabilized, but fell again in the final hours of trading. The currency has accumulated a 2,3% drop in the first days of 2017. As in recent days, the foreign exchange market operated without intervention from the Central Bank. Since December 13th, the monetary authority has neither bought nor sold dollars in the futures market.

At yesterday's meeting (11), Copom surprised the market and cut the Selic rate by 0,75 percentage points. The reduction was greater than expected by financial institutions, which projected a drop of 0,5 points.

In theory, the fall in basic interest rates encourages capital flight from the country. However, inflation fell more than expected in 2016, closing the year at 6,29%, the lowest level since 2013. Therefore, the fact that Brazil continues to have high real interest rates (nominal rates minus inflation) continues to stimulate foreign capital investment in the country.

In the stock market, the day was also one of gains. Rising for the third consecutive day, the Ibovespa index of the São Paulo Stock Exchange climbed 2,41% to 63,954 points. The indicator is at its highest level since November 8th. Petrobras shares, the most traded, rose 1,66% (ordinary shares, with voting rights at shareholder meetings). Preferred shares (with preference in dividend distribution) closed with a 1,53% increase.