SAO PAULO: Brazilian President Luiz Inacio Lula da Silva said on Tuesday he is worried about the recent weakness of the country’s currency, adding that “something” needs to be done to tackle what he called “speculation”. Lula did not elaborate on what measures could be taken to support the Brazilian real BRBY, which has weakened more than 16 percent against the US dollar so far this year and currently trades at its lowest level since January 2022. “I’m obviously worried about it, it’s speculation. I’ve been talking to people to see what we’re going to do,” Lula told a local radio station. “We have to do something - but I can’t tell you what, or I’d be warning my opponents.”

Traders have linked recent foreign exchange moves to a stronger dollar globally and local fiscal concerns, as the market has doubts about the Brazilian government’s ability to meet its goal of eliminating its primary deficit this year. Lula on Tuesday once again said that the government could not spend more than what it has and pledged to cut expenses if needed.

Lula’s economic team has been working on measures to reduce spending amid growing pressure to balance public accounts, although the leftist leader has underscored benefits for the poor will not be cut. In his latest criticism of central bank head Roberto Campos Neto, a public clash that many cite as one of the reasons behind the real’s weakness, Lula said that the Brazilian monetary authority cannot be led by someone with political bias. Lula and his allies have long seen Campos Neto as a political rival, arguing that he was appointed by former far-right President Jair Bolsonaro and blaming him for high interest rates in the country. – Reuters