Brazil’s Real Drops From Seven-Week High After Petrobras Results

Brazil’s Real Drops From Seven-Week High After Petrobras Results

by Filipe Pacheco/Bloomberg
10:26 AM BRT
April 23, 2015

Brazil’s real dropped from a seven-week high after the state-controlled oil producer published audited results for the first time since August, reporting that a corruption scandal cost $2.1 billion.
The real declined for the first time in three days, falling 0.4 percent to 3.0242 per dollar at 9:53 a.m. in Sao Paulo. It climbed Wednesday to 3.0108, the strongest level since March 5.
Allegations of kickbacks, bribes and inflated construction contracts at Petroleo Brasileiro SA helped to push the real down 11 percent in 2014 on concern the scandal has made it harder for Brazilian President Dilma Rousseff, a former chairman of the oil company, to attract political support for measures shoring up budgets and reviving the economy.
“There is much to be done within the company, especially in terms of improvement of management,” Sidnei Nehme, executive director at NGO Corretora in Sao Paulo, said in a telephone interview. “The problems aren’t close to being over.”
Swap rates on the contract maturing in January 2017, a gauge of projected changes in borrowing costs, increased 0.06 percentage point to 13.38 percent.