Brazil's real slides after Lula's win

What happened

President Luiz Inácio Lula da Silva won Brazil's presidential runoff on Sunday, 25 October, beating right-wing senator Flávio Bolsonaro with about 51.8% of the vote, according to the count reported by Business Today and The Rio Times. Markets reacted before Brazil's own exchanges opened. Reuters reported that November real futures fell 10% during Asian trading hours, and that a Tokyo-listed fund tracking Brazilian stocks plunged 15%. The vote also dominated Google's daily trending searches in Brazil, from local vote-count queries to footballer Richarlison celebrating the result.

Why markets moved so fast

Investors had positioned for a different outcome. According to Reuters, markets rallied after Flávio Bolsonaro unexpectedly finished first in the first round three weeks earlier: by Friday's close, stocks were almost 7% above their level before that round, and the real was nearly 5% stronger against the US dollar. A Citigroup survey of 73 investors, published on Friday, found that most expected the real to fall by at least 5% if Lula won, Business Today reported. Sunday's moves suggest that rally is now being unwound.

Fiscal worries in focus

The main concern is public finances. Reuters writes that Lula must slow the growth of Brazil's debt while protecting social programmes and investment. Public debt already exceeds 82% of GDP, and his team aims for a primary budget surplus of about 1.3% of GDP by 2030. “Investors want a clear and credible commitment to fiscal discipline,” said Alejo Czerwonko of UBS Global Wealth Management, who expects sentiment to stay weak until a clear fiscal plan emerges. Analysts quoted by Reuters said the choice of the next finance minister and the 2027 budget will be the first signals.

What the early numbers do and do not show

The first figures came from thin overseas trading. The Rio Times notes that Brazil's own markets had not yet confirmed the move, and Business Today points out that the currency derivative it cited does not directly reflect the market price. The spot real and the B3 stock exchange in São Paulo trade again on Monday, 26 October, and a first-day move can grow or fade once local investors step in.

Why it matters for money transfers

Exchange rates decide how many reais arrive when money is sent to Brazil. According to The Rio Times, a weaker real makes Brazil cheaper for people paid in dollars, such as travellers and expats, and does the opposite for Brazilian importers and anyone with dollar debts. For families receiving an international money transfer, the same logic applies: the amount in reais depends on the rate at the moment the transfer is converted. Whether you use a bank wire transfer or a money transfer app, check the rate and fee shown before you confirm, because on days like this exchange rates can move quickly.

What to watch next

Watch how the real and Brazilian stocks trade once local markets are open, who Lula appoints to his economic team, and the 2027 budget and spending cap, which investors told Reuters they want to see. The Rio Times also lists the US Federal Reserve's rate decision on Wednesday among this week's key events.

What it means for Odix Pay users

If you send money to family or accounts in Brazil, Odix Pay money transfer lets you send money to bank accounts abroad where the corridor is supported, with the fee and exchange rate shown before you confirm, so you can see what will arrive before you send. You can also get a personal EUR IBAN in your own name to receive euro payments. Our guide on how to send money abroad explains what to compare first. This is not investment advice. Availability depends on your country, and fees are shown in the app. More stories in the Odix Pay newsroom.