Brazil Real Falls on Forecast for Wider Current-Account DeficitBlake Schmidt
Brazil’s real declined as Banco Santander SA forecast that the current-account deficit widened further in August after reaching a decade high.
The real depreciated 0.4 percent to 2.2080 at 9:58 a.m. in Sao Paulo. Swap rates due January 2015 fell one basis point, or 0.01 percentage point, to 10.08 percent.
Brazil’s current-account deficit expanded to 3.5 percent of annual gross domestic product in the 12 months through August, Banco Santander analysts Fernanda Consorte, Tatiana Pinheiro and Adriana Dupita said in a research note today before the central bank’s report. The deficit was 3.39 percent in the prior month, the widest since 2002.
“The current account could remain very weak for several months, in our view, with the full effect of the real’s depreciation not being felt by some more sensitive items, such as remittances of profits and dividends and international travel,” the Santander analysts wrote.