Approximately 600,000 football fans have made their way to Brazil and at an estimated $2.5k spend per head ( according to govt sources) that’s $1.5 bln worth worth of Brazilian Real that has been/is being bought at a time when the central bank has also been intervening to prop up the ailing currency and curb inflation.
The central bank has sold foreign-exchange swaps and dollar credit lines to support the real since August, when the currency fell to a five-year low of 2.4549 per USD. The central bank extended its $60 billion currency intervention programme this month after inflation accelerated to 6.37% in May, approaching the 6.5% top end of the country’s target .
The currency’s gains this year follow three straight years of losses when it plunged 33% versus the greenback. Fans from Europe will find the euro 6.6% weaker versus the real this year, British fans will also get less for their money after the pound fell 2.9% and the real has gained 5.5% against the USD, making everything from hotels to taxis to drinks more expensive for foreign visitors.
But six months from now, when the tournament is over, the real will be almost 7% cheaper at 2.4 to the greenback according to the median forecast of 28 strategists surveyed by Bloomberg.
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Did any of our readers out in Brazil get ahead of the curve to buy reals last year ? Do let us know, and do post up some anecdotes from your trip so far.