Brazil’s real fell for a fifth consecutive day and reached a new record low, with the rout in the currency gaining momentum as investors sell amid concern the country’s finances are deteriorating.
Even as the central bank intervened to support the real, the currency tumbled 2.3 percent as of 4:47 p.m. in Sao Paulo to 4.1459 per dollar, a level unseen since the creation of the real in 1994. The country’s bond risk rose, yields on local government securities jumped and investors boosted wagers on higher interest rates over the coming years.
Brazilian assets have been beaten up this year on concern that President Dilma Rousseff lacks the political and popular support to push through spending cuts and tax increases that would shore up the country’s finances. The selloff has been exacerbated by concern about slowing global economic growth and speculation that a Federal Reserve interest-rate increase will spur an outflow of investment from emerging markets.
Brazil Energy Insight 
Leave a comment