By Marcela Ayres

BRASILIA (Reuters) – Brazil's Finance Minister announced on Wednesday the government has concluded discussions on new measures to strengthen the fiscal framework, deemed essential for improving the valuation of the country's risk assets, which have suffered due to fiscal concerns and U.S. election volatility.

After Republican Donald Trump's White House victory, the Brazilian real fell over 1.7% against the U.S. dollar, while long-term interest rates surged.

Speaking to reporters, Minister Fernando Haddad highlighted that global tensions have risen, exacerbated by comments made during Trump's campaign. However, he noted Trump's post-victory speech was more restrained.

"We need to wait a bit and focus on taking care of our own house – taking care of Brazil, our finances, and the economy – to be as little affected as possible, whatever the external scenario may be," he stated.

Even before the U.S. election results, Trump's rhetoric was considered damaging to emerging markets, raising concerns over potential inflation driven by his strong support for higher import tariffs, tax cuts, and immigration restrictions.

Such policies strengthen the U.S. dollar against other currencies and raise expectations for higher interest rates in the world's largest economy, drawing resources away from other markets.

Haddad emphasized that President Luiz Inacio Lula da Silva's discussions with other ministries to review the impending fiscal measures have concluded.

"All ministers are aware of our task to reinforce the fiscal framework and ensure financial predictability and sustainability in the medium and long term," Haddad remarked, without divulging specific details of the proposed package.

On Tuesday, Reuters reported that the government is preparing spending curtailment measures, including a proposal to place caps on health and education expenses under the existing overall spending limit.

Haddad mentioned that Lula will present these measures to Congress once the Chief of Staff's office, along with the Finance and Planning ministries, complete their preparations. He indicated that discussions with Senate and Lower House leaders might occur prior to this submission.