Brazil's currency, the real, has continued its plunge as investors grow skeptical of President Luiz Inácio Lula da Silva's budgetary plans.
The real, the worst-performing currency over the past four market sessions, has fallen over 3% against the US dollar in the past week. Its plunge against American currency is over 21% in the past year.
On Wednesday, Finance Minister Fernando Haddad told reporters that Brazil's currency could be the victim of a "speculative attack," Bloomberg reports.
"There may be speculative attacks, but I don't want to make a judgment about that, because the Finance Ministry works with fundamentals," Haddad reportedly said. The currency fell even further following the minister's remarks.
Investors are skeptical of Lula da Silva's budget deficit reduction plan. A series of cost-cutting measures designed to cut 70 billion reais ($11.3 billion) from the country's budget was marked up and approved by the lower house of the Brazilian legislature on Tuesday.
The plan, unveiled over the summer, did not find supporters from within Lula da Silva's leftist political party nor from the financial markets.
Lula da Silva, who entered office in 2023, does not have broad support; according to Pew Research, 48% of Brazilians have a favorable view of the 79-year-old politician.
Brazilian equities, as tracked by the iShares MSCI Brazil ETF (NYSE:EWZ), fell by 6% on Wednesday. The benchmark is trading down over 34% in 2024.
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