Brazilian real plunges after Lula’s re-election / São Paulo stock exchange falls by nearly 17%

The Brazilian real depreciated sharply on Monday after the surprise re-election of left-wing President Luiz Inacio Lula da Silva, while the São Paulo stock exchange recorded one of its steepest recent declines.

At around 13:30 GMT, the Brazilian currency was down 11.02% against the US dollar, which was trading at 5.5956 reais. This is the real’s lowest level since December 2025, according to data cited by Agerpres.

The benchmark Ibovespa index of Latin America’s largest stock exchange opened nearly 17% lower. The decline led to a 30-minute suspension of trading.

Analysts attributed the market reaction to the unexpected election result. Lula defeated Flavio Bolsonaro, the son of former President Jair Bolsonaro, who was considered more favorable to financial markets. Bolsonaro had led Lula in the first round, but the final result reversed the balance of power.

Flavio Bolsonaro refused to acknowledge his defeat. Analysts warn that market developments will depend, among other things, on how quickly he accepts the result and allows the constitutional procedures to proceed. Jair Bolsonaro is serving a 27-year prison sentence under house arrest after being convicted of attempting a coup.