The head of the Brazilian central bank says that the BRL has not been impacted by the carry trade but that it might be in the future.
This is nonsense, of course, or the government would not have enacted a 2% transaction tax on inflows to discourage hot money…
The real is rebounding this afternoon after sliding on risk aversion early in the day. It trades at 1.7450, from 1.7800 early on. The lack of concern from the central bank should only support the real further.
