Brazil’s real sank to a 10-year low as a record drop in retail sales added to concern that Latin America’s largest economy is slumping.
The local currency slid 1.1 percent to 2.8645 per dollar in Sao Paulo on Thursday, the weakest level on a closing basis since October 2004.
The real fell after the national statistics agency reported that retail sales tumbled 2.6 percent in December from a month earlier, the biggest drop since the series of data began in 2000. Analysts predict zero growth for Brazil this year, according to the median of about 100 estimates in a central bank survey published Monday.
“Investors are sensitive to all this negative economic data,” Reginaldo Siaca, a currency manager at Tov Corretora de Cambio in Sao Paulo, said in a telephone interview.
Retail sales rose 0.3 percent in December from a year earlier, slower than the median forecast, which called for a 2.4 percent increase. The broader retail index, which includes cars and construction materials, fell 2.2 percent, compared with a projected 1 percent gain. Regulated prices for items such as electricity, gasoline and buses rose 2.5 percent in January, the most in almost 12 years.
Bloomberg News, edited by ESM
