Brazil's real fell to its lowest level of 4.0124 per US dollar during the trading session on Tuesday. This level has never been recorded since the real's introduction in 1994.
Investors are trying to sell the national currency, as they no longer believe that Brazil's authorities could stabilize the economic situation and avoid the credit downgrade.
During the trading session at Rio de Janeiro Stock Exchange, the real sank to as low as 4.026 per the greenback losing 1.14 percent of its value. In addition, market participants do not eliminate a possibility of a further decline of the Brazilian national currency.
"The US dollar exchange rate may reach the level of 4.2 real to the end of the year," Mauro Calil, Investment Consultant at Ourinvest bank, said. However, some economists predict even steeper real’s depreciation, slump to 4.5 per US dollar.
The previous record low for the national currency of the largest South American country was set on October 10, 2002, when one greenback was equal to 4.005 real.
Earlier this month, the international rating agency Standard & Poor's downgraded Brazil's credit rating from 'BBB-' to 'BB +' with a negative outlook. The reasons for such a decision were corruption scandals, low-key performance of public finances, and political uncertainty.
