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Brazilian Real to US Dollar (BRL/USD) Exchange Rate – Real slips to four-year low

Currency Chart
The Brazilian Real touched a four year low as it continued its tumble on the back of concerns that the US Federal Reserve will opt to curtail its monetary stimulus programme.

The currency’s rapid decline caused the Brazilian Central Bank to intervene for a second day straight as it tries to battle the weakening currencies impact on higher than forecast inflation. So far this month the Real has tumbled 6.7% making it the worst performer among 16 major Dollar counterparts.

Uncertainty over whether the Federal Reserve will cut its monetary easing programme has had a big negative effect on emerging economies such as Brazil as investors worry that any reduction will lead to a reduction of inflows into those economies.

“If there’s more currency devaluation, there will be more inflation,” said the chief economist at Banco Espirito Santo de Investimento in Sao Paulo. “On top of that, the IGP-M shows that wholesale prices are under pressure again.”

Central Bank President Alexandre Tombini said that policy makers are working to reduce the impacts caused by the currency’s decline. Construction and consumer prices have risen by 0.74% in just 20 days. Tombini said that Brazil is prepared to face the ‘adverse winds’ of a stronger Dollar and has the capacity to get the currency market function adequately.

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The decline in the nation’s currency and the impacts of higher inflation will surely add to the anger of the tens of thousands of protestors who have launched demonstrations in a number of Brazil’s biggest cities.

On Wednesday the Brazilian government announced that it was deploying a national security force to quell the protests in the cities of Rio de Janeiro, Belo Horizonte, Salvador, Fortaleza and the capital Brasilia. The announcement comes after riot police and protesters clashed in fresh protests on Tuesday in Sao Paulo.

Current Real (BRL) Exchange Rates

The Pound Sterling/ Brazilian Real Exchange Rate is currently in the region of: 3.4208

The Euro/ Brazilian Real Exchange Rate is currently in the region of: 2.9281

The US Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.1850

The Australian Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.0795

The New Zealand Dollar/ Brazilian Real Exchange Rate is currently in the region of: 1.7520

The Canadian Dollar/ Brazilian Real Exchange Rate is currently in the region of: 2.1406

(Correct as of 12:00 pm GMT)