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Brazil Real Falls as Goldman Sachs Cites Fiscal Insolvency Risk

  • Goldman Sachs expects real to drop to 4.4 per dollar this year
  • Annual inflation rate unexpectedly accelerates to 10.84%
Updated on

Brazil’s real weakened after inflation surprisingly accelerated and as Goldman Sachs said the currency is poised to drop another 11 percent this year while the government struggles to contain consumer-price increases and shore up its budget.

Sentiment in Brazil remains distinctively negative and the dominant view is that things will get worse before they get better, Alberto Ramos, a senior economist at the bank, wrote in a report Tuesday after a three-day visit to Brazil and meetings with policy makers at the Finance Ministry, central bank, national development bank and Petrobras.