Yes

>>BRL Tariff Adjustment: Limited Backing Fuels Guarded Optimism for the Brazilian Real

BRL Tariff Adjustment: Limited Backing Fuels Guarded Optimism for the Brazilian Real

crypthub

about 2 hours ago

Tariff Policy Shift

Brazil cut average tariffs from 11.6% to ~10.4% on ~6,000 imports, lowering duties on industrial inputs and capital goods while raising protection for consumer goods made domestically. The move seeks to improve manufacturing competitiveness and trim the current‑account gap. It follows a history of liberalization, protectionism, and now a balanced approach.

Commerzbank Assessment

Commerzbank estimates the changes could lift Brazil’s trade balance by about 0.3% of GDP over 18 months, offering only modest support for the real. Analysts cite intense competition from Asia, the real’s sensitivity to commodity prices, and persistent infrastructure bottlenecks as limiting factors. Past tariff revisions in 2012 and 2017 showed similar small currency effects.

Market Reaction & Outlook

The real rose ~0.8% after the announcement but surrendered half the gain as investors digested the modest outlook; futures volume rose 15%. Lower input tariffs may ease production costs, yet the central bank says monetary policy will stay driven by overall inflation trends. Long‑term gains will require complementary reforms in infrastructure and regulation.