Elections and the exchange rate will be decisive in shaping the path of monetary policy.

In an interview with Bloomberg Línea, our partner and Chief Economist, Luis Otavio Leal, highlighted that the behavior of the U.S. dollar will be a determining factor for the pace of interest rate cuts in 2026.

Leal explained that a more stable exchange rate creates room for continued Selic rate cuts, while a more stressed environment—especially during an election year—could limit the Central Bank’s actions. The analysis reinforces the importance of the exchange rate and market sentiment in guiding monetary policy in the coming months.

Read the full interview here