Brazil braces for more pain

John Lyons and Rogerio Jelmayer – The Wall Street Journal, 9/24/2015

Brazil’s battered currency on Thursday touched a new low, unemployment surged and the central bank forecast a far deeper recession—a litany of woes suggesting a major crisis ahead for this once high-flying economy with a long history of booms and busts.

The real, already the worst performer of any major global currency so far this year, hit a new intraday low of 4.24 reais per dollar, prompting Alexandre Tombini, the head of the central bank, to make a surprise announcement that Brazil could dip into its $371 billion in reserves to stem the currency’s bleeding.

Despite the slight rebound to 4.04 per dollar prompted by the remarks, the real has lost around 35% of its value this year, edging out Kazakhstan’s tenge as the biggest loser so far this year.

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