Economists at Commerzbank expect the Brazilian Real to defend its strong level against the US Dollar this year. However, monetary policy support for BRL is likely to gradually weaken in 2024.

A somewhat weaker Real next year

Attractive real interest rates should continue to support the Brazilian Real even after the start of the rate-cutting cycle. 

In the longer term, however, we see depreciation risks for the BRL, mainly due to our concerns about a less hawkish monetary policy.