Inter: Credible Fiscal Adjustment Could Push Dollar Below R$5, Cut Selic Expectations

A study by Banco Inter suggests that if the upcoming presidential election signals a credible fiscal adjustment, the dollar could fall below R$5, 2027 IPCA expectations could drop by 0.15 points, and the market could price a Selic rate 0.35 points lower over two years. The analysis decomposes volatility from the last three elections to isolate fiscal-electoral uncertainty. This is a forward-looking scenario, not a forecast, and hinges on the election outcome and policy credibility.