The Brazilian real is trading at or near fair value after losing one quarter of its worth since Jan. 1, economists said, suggesting a possible respite for one of the year’s most battered currencies.
Emerging market currencies in general have been sliding, and unexpected domestic and international events could still cause the real to overshoot toward its all-time low of 4 reais per dollar. But even Brazil’s political crisis, one of the main drags on the currency this year, does not look as bad as it did a couple of weeks ago.
Nine of 10 economists surveyed by Reuters estimate that, considering Brazil’s economic fundamentals, the real is now fairly priced at between 3.20 per U.S. dollar and the current level of 3.50. So far this year, it is the fourth-worst performer among the 152 currencies tracked by Reuters, only outperforming those of Kyrgyzstan, Ukraine, and Azerbaijan.
Economists acknowledge the real could keep falling as a weaker China cuts back on commodity imports from Brazil. But additional losses are looking less likely following signs that President Dilma Rousseff may be breaking a political logjam that has been blocking reforms.
Brazil Energy Insight 
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