- Valor reports that the government’s spending cut plan could include changes to the law on readjustment of the minimum wage, subjecting it to the rules of the fiscal framework, which allows spending to grow by 2.5% above inflation. Such a change could save as much as BRL 11bn between 2025 and 2026, according to the report.
- Bloomberg reports that President Lula will meet with Defence Minister Jose Mucio this afternoon to discuss the package. However, he is said to be in no rush to announce the spending cut plan, according to local media, with current focus on the G-20 summit in Rio next week.
- Ahead of the rescheduled FX credit line auction, USDBRL has risen by 0.5% today towards 5.79. DI swap rates are also underperforming, with yields up by 18-19bp in the belly and long-end of the curve.
- For USDBRL, the bull cycle remains intact, with attention on key resistance and the bull trigger at 5.8750.
BRAZIL: Government Spending Cut Package May Adjust Min Wage Rules
Last updated at:Nov-13 15:17By: Keith Gyles
Brazil
- Valor reports that the government’s spending cut plan could include changes to the law on readjustment of the minimum wage, subjecting it to the rules of the fiscal framework, which allows spending to grow by 2.5% above inflation. Such a change could save as much as BRL 11bn between 2025 and 2026, according to the report.
- Bloomberg reports that President Lula will meet with Defence Minister Jose Mucio this afternoon to discuss the package. However, he is said to be in no rush to announce the spending cut plan, according to local media, with current focus on the G-20 summit in Rio next week.
- Ahead of the rescheduled FX credit line auction, USDBRL has risen by 0.5% today towards 5.79. DI swap rates are also underperforming, with yields up by 18-19bp in the belly and long-end of the curve.
- For USDBRL, the bull cycle remains intact, with attention on key resistance and the bull trigger at 5.8750.
