Brazil: Brazilian real falls to lowest level in almost three years
May 11, 2012
On 11 May, the Brazilian real (BRL) traded at 1.97 per USD, which was 7.1% weaker than the level registered on the same day the previous month. The drop followed April's 4.5% decline. In fact, the BRL's value against the U.S. dollar has now fallen to the lowest level observed since mid-2009. In annual terms, the real has lost 21.3% versus the USD. The weakening of the real can be partly associated with fading investors' appetite towards emerging market assets, as political turmoil in Europe fuels a flight to quality. In addition, commodity prices have moderated recently amid concerns of decelerating growth in China. Finally, the weakening of the Brazilian currency coincides with cuts in the SELIC rate in mid-April, which now sits only a notch above the historical low of 8.75%.