Business · Markets · 7 hrs ago
Brazilian interest rates rise as presidential race tightens
Brazil’s future interest rates rose for a fourth straight session on Friday as investors watched the presidential race.
New polls put Senator Flávio Bolsonaro and President Luiz Inácio Lula da Silva in a technical tie, meaning the polling gap is within the surveys’ margins of error.
A CNT/MDA poll showed Bolsonaro at 46.8% and Lula at 45.9%, while a Datafolha poll also found them close in a possible second round.
Some investors believe a Bolsonaro presidency could bring tighter control of public finances, though he and his economic advisers have not presented specific adjustment plans.
Brazil’s gross public debt reached 82.9% of the economy in August, up from 71.7% at the end of 2022.
Investors expect another small interest-rate cut in November, but views are divided on December’s decision, which may depend on the election’s effects on the currency and inflation expectations.
Brazilian interest-rate futures rose for a fourth consecutive session on Friday as polls showed a close presidential race between Flávio Bolsonaro and Luiz Inácio Lula da Silva.
The January 2035 DI rate ended at 12.885%, up 8 basis points, while the January 2028 rate closed at 12.92%, up 3 basis points.
A CNT/MDA poll put Bolsonaro at 46.8% and Lula at 45.9%, within the poll’s 2.2-point margin of error.
Investors expect another 25-basis-point cut to the Selic rate in November but are divided over the central bank’s December decision.
- Who
- Interest-rate investors and presidential candidates Flávio Bolsonaro and Luiz Inácio Lula da Silva.
- What
- Brazilian interest-rate futures rose for a fourth consecutive session as polls indicated a close presidential race.
- When
- Friday, October 16, 2026.
- Where
- Brazil.
- Why
- Polls showing a close race affected market expectations about fiscal policy, the exchange rate and inflation.
This story does not have two clearly opposing sides.
A Datafolha poll showed Bolsonaro leading Lula by 2 percentage points in a second-round scenario, down from a 4-point lead.
A CNT/MDA poll put Bolsonaro at 46.8% and Lula at 45.9%, within its 2.2-point margin of error.
After the CNT/MDA poll was released, the January 2035 DI rate reached an intraday high of 12.945%.
DI rates rose for a fourth consecutive session.
- January 2028 DI rate
- 12.92%, up 3 basis points
- January 2035 DI rate
- 12.885%, up 8 basis points
- CNT/MDA poll
- Bolsonaro 46.8%; Lula 45.9%
- Poll margin of error
- 2.2 percentage points
- Selic rate
- 13.75%
What people are saying
I am concerned about the increase in Brazil’s public debt and defend economic growth as a way to solve the fiscal problem.