Last week, emerging market and commodity currencies remained under pressure due to concerns about a reduction in monetary stimulus by the Fed and concerns about global growth. Moreover, the sentiment on Brazil also remained weak. President Dilma Rousseff said that inflation and public accounts are under control. Finance minister Mantega set a target of 2.3% of GDP for the 2013 primary surplus. These comments are intended to ease market concerns about the current unfavourable growth/inflation mix and aim to improve sentiment. The government further eased capital controls to limit the depreciation of the Brazilian real. Two months ago we downgraded the Brazilian real to neutral but left a modest appreciation path in our forecasts. As we see a minor improvement of the growth/inflation mix in the near-term and we expect a higher USD, upside for the BRL is limited, at best. We have adjusted our forecasts for the BRL to 2.0 year-end 2013.