BRL expensive or cheap?

Ignoring valuation, but looking at some historical charts for USDBRL.

Volatility structure and levels on USDBRL options are on the high-end of data since Mar 2011, while it’s relative attractiveness to the USD, in terms of 2y yield x realized carry [a bananas to apples comparison of sorts, I know], at the low end of past history.

I don’t want to get into the “rule of law”, “quality of political class” and “entrepreneurial spirit” side of the questions, despite these being the levers that make the big difference over the long run.

The Qs are:
1/ Do you believe the Brazilian people can accept short-term [even harder] hardship in order to achieve longer-term balance?
2/ And do politicians, paid to work for 4-yr mandates, tell the truth to their electorate?

Then we flip this question to the US market, and European markets.

Perhaps only those who survived wars or communism or were exiled, sent to prison overseas, decades or centuries ago, are able to do so.

USDBRL Vol + 25% Delta Risk-Reversal History

USDBRL “real yield” differential

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Feel free to get in touch. I will surely answer you when I find some time. A brief introduction would be welcomed.