Brazilian exchange rate misalignment estimates are updated until July 2017

Real effective exchange rate got stronger again in last July, interrupting the sequence of depreciation that was taking place since last February. Although average from all models' estimates indicates a small overvaluation - about 5,3% - estimate obtained from the model that incorporates information about external accounts suggests an undervaluation of -8%. Our conclusion is that Brazilian exchange rate was near or slightly undervalued in last July. 
There is also an evidence that fundamentals are getting better in this year due to improvements in external account results. Our guess is that we would have observed a stronger exchange rate level if Brazil had not been facing a political crisis during recent years.