Brazil’s central bank has had a tough month. In the two weeks between October 8 and 20, it was forced to spend $3.2 billion in the spot FX market to prop a continually faltering real.
The currency has lost more than a third of its value since the beginning of August as Brazil got sucked into the global financial crisis. The slide in the value of the real went beyond anyone’s expectations causing several Brazilian corporates, especially exporters, to reveal more than $2 billion of losses after making bad currency bets.
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