Dollar reached R$4.16, highest rate since the real was created

The US dollar is high for the third consecutive day, it closed the trading session at the highest rate since the real was created in 1994. The dollar reached R$4.166 this Thursday (Jan. 21), up 1.47%. The previous record was established on September 23rd (R$4.146). Throughout the day the US dollar was sold at R$4.172.

The currency's rise happened a day after the Central Bank's Monetary Policy Committee (COPOM)  decided not to change Brazil's benchmark interest rate (SELIC, currently at 14.25% per annum). But the exchange rate was also affected by external factors. The Shanghai Stock Exchange slump 3.23%, the lowest rate since December 2014. The Chinese economy's slowdown has affected the global market despite the Chinese government's announcement to pump 600 billion yuan into their economy, which is the world's second largest economy.

The Chinese economy's instability affects especially commodity-exporting countries, like Brazil. Due to a lower demand for products, like iron ore and soybeans, prices plummet and there is a lower inflow of dollars of trade into the country, causing the high in the currency.

On the Stock Exchange, the day was marked by a mild recovery. Ibovespa index of the São Paulo Stock Exchange ended the trading session on Thursday posting a high of 0.51, reaching 37,837 points. Petrobras' shares, which yesterday (Jan. 20), stood at the lowest rate in 13 years, rose back. The preferred shares (which pay dividends to the shareholders) reached R$4.52, up 1.81%, whereas the common shares (which carry voting rights in the company's board) closed at R$6.75, up 6.33%.

* Data from Agência Lusa were added to this story

Translated by Amarílis Anchieta