Tagged: politics

What’s going on with the exchange rate!?

So a bit of a bad period financially again it seems in the world…
Chinese stock market crashes, depression in the US and European markets…
And Brazil is in a recession, even if it seems to be in the depths of denial! On an campaign video two weeks ago PT (Dilma’s party) were talking about how there is no crisis, it is all down to the media overplaying it and scare mongering. This week she has made a statement saying that perhaps it is worse than first realised…

And I see no where better to show that than a look at the exchange rates. For me, I am interested in the rate against the pound.
Today we are close to hitting R$5.6 to the GBP (oops… I checked at midday, seems we have shot past 5.6 since then to 5.64). When I first arrived in Brazil it was around 3. Enough said?  Actually, perhaps a few pictures can be worth a thousand words!

Looking at the last 90 days (all rates courtesy of Oanda) shows quite how much it has changed lately, from 4.8 to 5.6 representing almost a 20% swing, which for any Brazilian wanting to go abroad makes it a very expensive prospect…

last 90 days

In fact, looking back at the 3 years I have been in Brazil, it is a fairly solid trend of increasing. I have highlighted the 2.9, which was around when I got my Brazilian work contract.

last 7 years

In fact, we have to go back a long time to find when it was last like this! 2002 was the previous time the exchange rate reached these levels… In fact, in the last 20 years, it has only been anywhere near here twice, and had a very volatile journey from 1995 to 2015… From around 1.5 to 5.9!

last 20 years

But for a Brazilian, the current state of the economy must be very worrying. I had hoped that the rate was stabilising, but it seems not with another increase over the last 2 days. There’s lots of people talking about setting a new record of hitting 6 by the end of the year… It doesn’t even look like we will have to wait that long unfortunately.

Of course, for anyone visiting Brazil, now is a great time, and in fact every day is that little bit better!  I’ve had many posts in the past about how expensive things here can be, however now some things that used to seem expensive are now seeming far more reasonable when I think in terms of pounds.  And as a fan of fine dining, Rio and São Paulo can have some true gastronomic bargains going on with a great set of Michelin Star restaurants to visit, as well as just a great set of restaurants that didn’t quite make it in the first ever Michelin Guide for South America.  For me, there’s a visit to D.O.M. is coming up in October and I can’t wait!

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The banging of pots

So I witnessed my first banging of pots today.
My street in Ipanema became alive with people leaning out of windows, shouting ‘Fora PT’ (Out PT) while banging on various kitchen pots and pans. I was thinking I can’t see the UK having a similar level of protests against a political party, especially in an area which is the second most affluent area of Rio de Janeiro after Leblon. Admittedly, I don’t think the UK achieves quite the same level of political corruption scandal.
The protest in Rio today was somewhat smaller than some of the ones in June 2013, with ‘just’ 25,000 people taking part. São Paulo attracted more, with a rumoured half a million. Most people don’t expect anything to come of it however, certainly not the rumoured impeachment. But certainly the country is expecting more from its government now.

It’s been a while since my last post… And the most significant thing, to me at least, is the exchange rate. Today is R$4.79 to the pound. If the current rate of growth continues, we are on to hit R$5 to the pound! This is from R$3 when I first arrived at the end of 2012, and indeed from just under R4$ at the end of January this year…
This makes it very expensive for Brazilians going abroad – the trend is similar to the Euro and USD. For expats over here, especially if they send money back home, their income potential is also decreasing rapidly. But it also translates in to what things cost. For imported products, these costs are being passed on to the consume, along with inflation at rates far higher than we are used to in Europe (but with interest rates also much higher). A kitchen appliance I purchased in early 2013 I saw for twice as much on the shelves yesterday, now on ‘offer’ for only 50% more…

Which makes it odd that somehow I achieved a bargain on my new TV with a huge discount.. not sure why it was so cheap – indeed with the exchange rate, I paid less than it costs in the UK by quite a bit!! But why would I need a new TV… I may have lied when I said the exchange rate was the most significant thing! Another flooding of my apartment…
In a heavy storm a few weeks ago, my ceiling decided to leak… a lot. I woke up to find both the MacbookPro and the TV having had a large drink with water having come in from the ceiling directly above where the TV and Mac were living. Thankfully my building has insurance that covered the damage, as it was caused by a problem with the building itself. It did lead me to discover quite how insanely expensive Macs are here though! Back to the exchange rate… The new model I purchased in the UK was close to 50% less than here. Which is why the TV is so odd being such a good buy!