Brazil’s High Interest Rates Fuel BRL Optimism: UBS Forecast Sees Currency Strength

UBS predicts a strong future for the Brazilian Real, driven by a favorable interest rate differential. The bank highlights that Brazil’s high benchmark interest rates, known as the Selic rate, attract foreign investors seeking higher returns on their fixed-income investments. This creates demand for Brazilian Real (BRL), supporting its value. The report explores the carry trade phenomenon and how this impacts BRL’s performance.