Brazil’s real led losses in Latin America as traders dumped the currency following a news report that the central bank president may step down, adding to political turmoil that has rattled markets this week.
The real slumped for a third day, losing 1.4 percent to 3.8202 per dollar at 10:25 a.m. in Sao Paulo. One-week implied volatility climbed 1.55 percentage point to 28.275 percent, the highest among the world’s most-traded currencies.
After driving up the currency to a six-month high last week, the market has gone from hot to cold as a spreading corruption scandal deepens the country’s political crisis. Valor Economico columnist Claudia Safatle reported Wednesday that central bank President Alexandre Tombini may ask to leave his post. It comes on top of news reports that former President Luiz Inacio Lula de Silva, may join the cabinet, a move that could shield him from investigations into corruption allegations. His nomination signals a dramatic shift in economic policy, Safatle said.
Brazil Energy Insight 
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