Saturday, 01 December 2012 05:12
RIO DE JANEIRO: The Brazilian real closed at its weakest in over 3-1/2 years on Friday after third-quarter economic data disappointed economists, suggesting the government may let the currency depreciate to prop up the economy.
The losses were exacerbated by investors trying to test the central bank's tolerance to a weaker currency at a time of the month when dollars are usually more scarce due to profit remittances by Brazilian units of foreign companies.
The real ended 1.6 percent weaker at 2.1299 per US dollar. The currency also closed above the ceiling of an informal trading band of 2.0-2.1 reais per dollar where it has been stuck since early July.
The central bank's absence from the foreign exchange market this session suggested that informal trading range was moving to accommodate a weaker currency, which could boost exports.
Copyright Reuters, 2012