Brazil’s real plunged to a near 11-year low in São Paulo, amid concerns that rising political uncertainty will undermine president Dilma Rousseff’s fiscal austerity plan.
The real weakened 1.3 per cent against the dollar to R$3.1039 in midday trade, its lowest level on a closing basis since June 2004. It has fallen 14.5 per cent since the start of 2015, one of several emerging market currencies to come under pressure recently from sliding commodity prices, a stronger US dollar and domestic economic weakness.
The real’s latest drop followed a tumultuous weekend in Brazilian politics in which a speech by Ms Rousseff seeking to convince the country of the need for fiscal austerity provoked protests in large cities. Meanwhile prosecutors launched investigations into 54 senior political figures over a scandal at oil company Petrobras.