The Brazilian real hits all time low as it’s the worst emerging market currency this year

Hard times in Brazil

The market seems to love the idea of opening up while hating the idea of not closing at all.

USD/BRL hit a record today at 5.65. The Brazilian real is now down almost 30% on the year with hardly a bounce off the bottom.

What’s even worse is that the Brazilian Bovespa is one among the world’s worst performing equity markets — possibly the worst. In BRL terms it’s down 31% and in USD terms it’s down 49.3%.

The latest leg down in the currency comes on increasing bets of rate cuts and proposed amendments to the constitution to allow the central bank to buy government and corporate bonds.

Recently, the bank’s Monetary Policy Director Bruno Serra refrained from announcing a program to systematically sell dollars from Brazil’s foreign reserves, but said this doesn’t mean the central bank is stepping out of the market any time soon.

“We will intervene for as long as needed,” he said at a Bloomberg event in Sao Paulo, pledging to use all tools in the necessary amounts whenever it deems the foreign exchange market dysfunctional.

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