Brazil's central bank intervened again to prop up the world's worst-performing currency

Brazilian assets are expected to underperform all major peers throughout the year, with the real heading for its biggest decline since the 2020 pandemic onslaught, as doubts grow about President Luiz Inácio Lula's commitment to tackle the ballooning budget deficit. The real has depreciated by nearly 22% against the dollar this year, its worst performance among 31 major currencies. The decline accelerated in November after investors were disappointed by a much-anticipated fiscal package. Even a historic intervention by the central bank, which tapped about $20 billion of reserves in two weeks, failed to reverse the decline. On Monday, the last day of trading for local assets in 2024, monetary authorities intervened again, selling about $1.80 billion on the spot market. After the announcement, the real reversed its earlier decline, rising 0.4% at one point, and trading was light during the day.