Brazil Real Volatility Increases as Political Turmoil Worsens

Volatility in Brazil’s real increased after President Dilma Rousseff named a new finance minister that some investors say won’t be as strong an advocate for efforts to shore up the country’s fiscal accounts.

One-month implied volatility in the real climbed to 23 percent, the highest among 16 major currencies tracked by Bloomberg. The real swung between gains and losses Monday, advancing 0.3 percent to 3.9725 per dollar as of 11:41 a.m. in Sao Paulo, after earlier dropping as much as 0.2 percent.

Nelson Barbosa, the former planning minister, takes over the finance job amid a deepening economic crisis spurred by political turmoil, falling commodities prices and investor skepticism. The change, said to be spurred by Levy’s frustration at the government’s inability to push through fiscal reforms, adds to the muddled outlook for the government after the Supreme Court ruled last week on new impeachment procedures that may improve Rousseff’s odds of hanging onto her job.

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