Brazilian Real Leads Losses as Output Falls More Than Forecast
- Currency drops to new 12-year low as rout gains momentum
- Lawmaker reported saying deficit may be worse than projected
Brazil’s real led losses among major currencies and fell to a new 12-year low as a bigger-than-forecast drop in industrial production added to concern that the Latin American nation is facing its longest economic contraction since the 1930s.
The rout gained momentum after a report showed output declined 1.5 percent in July from a month earlier, the biggest drop this year and worse than all of the forecasts of economists surveyed by Bloomberg. Fiscal turmoil weighed on the real as O Estado de S. Paulo cited a lawmaker in reporting that next year’s deficit before interest payments may be bigger than the government’s revised projection of 30.5 billion reais ($8.1 billion). The real may extend its decline as the central bank is forecast Wednesday to refrain from raising borrowing costs for the first time in eight meetings.