The Brazilian real has not fallen this much since 1999 after Lula's unexpected victory

The Brazilian real experienced its largest drop since 1999 following Luiz Inácio Lula da Silva's unexpected election victory. Investors had anticipated a win for Bolsonaro, leading to a significant appreciation of the real earlier. However, after Lula's win, the real lost over 11% against the dollar, closing down 8.1%. The Bovespa index fell by 13.9%, marking its biggest decline since March 2020. Concerns about increased government spending during Lula's new term, amidst Brazil's existing debt issues, are driving investor anxiety. Lula's ability to manage public debt while maintaining social programs will be crucial in his fourth term. The election results have sparked controversy, with claims of fraud from Donald Trump and Flávio Bolsonaro, who demands the annulment of the results.