The Brazilian real’s volatility has dropped to its lowest level since March 2020, influenced by a record trade surplus and an increased supply of USD in the domestic market. Brazil’s trade surplus reached a historic high of USD 98.8 bln in 2023, significantly surpassing the USD 61.5 bln recorded in 2022, contributing to the reduction in the real’s volatility, which had peaked at 23% following President Lula da Silva’s election at the end of 2022. Notably, the Brazilian central bank did not intervene in the currency market through USD spot or credit line auctions in 2023, a first in 25 years.