# The dollar hits R$ 5.65 as markets reject the Moretti plan

The US currency closes at its highest level since June 2025 after investors judge the Lula government's fiscal adjustment package too timid. For columnist Vinicius Torres Freire, around 80% of the rise since October is homegrown.

- Section: Business
- Published: November 13, 2026
- Address: https://ceoone.com.br/en/article/the-dollar-hits-r-5-65-as-markets-reject-the-moretti-plan
- Em português: https://ceoone.com.br/artigo/dolar-chega-a-r-5-65-e-mercado-reprova-o-plano-moretti.md

![Traders seated with their backs to the camera before monitors, under an electronic board of red and green quotes, on the former Bovespa trading floor](https://pub-b80e49b2737940b3ab5d3f20d0578192.r2.dev/artigos/dolar-chega-a-r-5-65-e-mercado-reprova-o-plano-moretti-foto.webp)

Photo: Rafael Matsunaga/Wikimedia Commons (CC BY 2.0)

## Key points

- The dollar closes at R$ 5.65, its highest since June 2025, after the market judges the Moretti fiscal adjustment plan too timid.
- The package creates a spending freeze floor, deepens the cut in tax benefits and caps tax offsets, with a total impact of R$ 60 billion.
- For Vinicius Torres Freire, around 80% of the rise since October comes from domestic problems, and the plan stems some of the bleeding without solving it.

The dollar closed Thursday, November 12, up 1.60% at R$ 5.650. That is its highest level since June 2, 2025, when the currency ended the session at R$ 5.673. At its intraday peak it reached R$ 5.654. The trigger was the cool reception given to the so-called Moretti plan, the public accounts adjustment package the government presented the day before, which the market read as timid given the size of the fiscal challenge.

For Vitor Kayo, senior economist at Nomad, the dollar is returning to levels not seen for quite some time under internal and external pressure at once. Doubt over what Congress will actually approve is pushing investors towards protection in hard currency. Disappointing results from a state-controlled bank deepened the unease over public finances, while October inflation, below expectations, did not change bets on the Selic rate.

The Ibovespa fell 0.42% to 171,324 points. The heaviest weight came from Banco do Brasil, whose shares dropped 8.34% after the bank reported a 66.5% fall in adjusted third-quarter net income. Magazine Luiza lost 7.70% and BTG Pactual 3.23%. The weekly picture is harsher: the stock exchange fell 18%, its steepest decline since 2020, and the dollar rose 9.18%, its biggest gain in 18 years.

"It is a first step in the right direction, but still insufficient to ensure the sustainability of the public debt or to stop it from growing at the pace seen recently. That is the central point of the fiscal discussion," says William Castro Alves, chief strategist at Avenue. In his reading, the government buys some time but has yet to present structural measures capable of solving the problem.

## What the plan provides

The bill was introduced on Wednesday, the 11th, by Senator Jaques Wagner (PT-BA). The same day, the rapporteur, Senator Eduardo Braga (MDB-AM), delivered his report, and the main text passed the Senate on Thursday. The proposal gives the economic team tools to pursue the midpoint of the primary balance target, the difference between revenue and spending excluding interest on the debt.

According to Planning and Budget Minister Bruno Moretti, the measures add up to an extra effort of R$ 46 billion to R$ 56 billion to meet the 2027 target, and the total impact reaches R$ 60 billion. Another R$ 11 billion, in measures such as postponing Kandir Law transfers and limiting social security offsets, will be used to accommodate campaign promises, such as the Bolsa Família increase and the expansion of Pé-de-Meia. These do not amount to a structural cut in spending.

The centrepiece is a spending freeze floor. If the projected primary balance falls below the lower bound of the target, a deficit of R$ 28.1 billion next year, and funds must be frozen, a trigger cuts the spending growth allowed by the fiscal framework from 2.5% to 2% above inflation. Once activated, it cannot be reversed, not even if tax collection improves. In 2027, the difference is worth R$ 12.8 billion.

There is also a second layer of freezes: the government may block a larger amount of funds to reach the midpoint of the target, which in 2027 corresponds to a surplus of R$ 8.5 billion, excluding spending outside the rule. Today, the brake only goes as far as the floor. To do so, it may even hold back mandatory spending, currently immune to freezes, as long as constitutional obligations are preserved, such as pension and welfare benefits, civil servants' salaries and the minimum floors for Health and Education. Government officials said the package should authorise the cancellation of up to R$ 12.8 billion in spending planned in the 2027 Budget.

The adjustment also reaches revenue. Tax offsets, credits taxpayers use to pay other taxes, may be capped at an amount equivalent to the effort made on spending. The across-the-board cut in tax benefits approved at the end of 2025 doubles from 10% to 20%, with exceptions for the payroll tax relief, incentives for the information technology and semiconductor sectors, and exemptions on vehicle purchases by people with disabilities or autism spectrum disorder.

Until 2030, extraordinary oil revenue, such as sales of the Union's oil and the export tax on the product, will be removed from the base of net current revenue, the indicator that sets the minimum for Health spending. The text also gives Congress 120 days to approve rules on super-salaries and pay perks, with estimated savings of R$ 3 billion next year, and cuts the annual Kandir Law transfer to states and municipalities from R$ 4 billion to R$ 1 billion until 2030. The difference will be paid from 2031 to 2037.

## A patch, not a plan

In his Friday column, Vinicius Torres Freire notes that an expensive dollar sets off alarms for any politician. It is a popular gauge of economic trouble, a smell of burning that shifts voters' mood, including among the poorest, and shows up in confidence surveys and government approval ratings. Today the effect may be greater, because lower-income households also take part in international trade, buying on Chinese platforms. For the median citizen, the dollar does not hurt like food inflation. But it does not go down well.

Often, the columnist observes, the real's depreciation has nothing to do with domestic problems. Thursday's rise, for instance, reflects the prospect of higher interest rates in the United States. But since early October, around 80% of the increase can be blamed on homegrown troubles. The dollar hovered around R$ 5.15 from mid-year until the first round of the election. At R$ 5.65, it already means more inflation.

A credible plan, he writes, would contain the pace of spending growth and count on more revenue: a four-year programme reviewing spending and tax benefits, and even taxes on large fortunes. A bill to tax wealth above R$ 15 million was introduced in the Chamber on Wednesday. For now, however, these are emergencies and patches, and the Moretti plan 1 is likely to be followed by a second one to plug the holes of 2027. "It stems some of the bleeding, but it does not solve it, not even close." Without a convincing macroeconomic plan, creditors will keep charging more to finance the government, and those with money will shelter in the dollar. The question he leaves: will R$ 6 wake people up?

![The Federal Senate chamber seen from the back, with blue desks, the presiding table beneath the wall of metal blades and the illuminated dome](https://pub-b80e49b2737940b3ab5d3f20d0578192.r2.dev/artigos/dolar-chega-a-r-5-65-e-mercado-reprova-o-plano-moretti-senado.webp)

The Senate chamber, where the main text of the Moretti plan was approved. Photo: Agência Senado/Wikimedia Commons (CC BY-SA 4.0)

## The wind from abroad

The United States also weighs. On Tuesday, the 11th, the US consumer price index showed a 0.4% rise in October, after 0.6% in September. The figure strengthened bets that the Federal Reserve will raise rates again at its December 8 and 9 meeting, at a time when officials at the US central bank are already worried about inflation. Higher rates there tend to draw money out of emerging markets such as Brazil.

## Sources and editorial notes

- Based on reporting by Folha de S.Paulo, November 13, 2026 edition, economy section: reports by Maeli Prado and Júlia Galvão (with Reuters) and by Idiana Tomazelli, and a column by Vinicius Torres Freire.

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