At 4-Per-Dollar, Brazil’s Currency and Reputation Are in Tatters

The collapse of Brazil’s currency is becoming emblematic of all the progress in the past decade that the nation has now squandered.

The real tumbled to the lowest level since Brazil introduced the tender in 1994, wiping out the gains — as well as the hard-earned credibility — that former President Luiz Inacio Lula da Silva won over the course of his tenure. Lula overcame skeptics who worried that he would push Brazil to default and helped Latin America’s biggest economy win its first-ever investment grade as the nation transformed into an emerging-market powerhouse.

Now, Brazil is relinquishing those achievements at an alarming rate as it wilts under the growing strain of an ever-expanding corruption investigation and a recession on pace to be the worst since the Great Depression. The real has plummeted 60 percent since President Dilma Rousseff, Lula’s handpicked successor, took office in 2011. In that span, Brazil has suffered three downgrades, with Standard & Poor’s cutting the country back to junk this month.