By Brennan Stark, Contributing Reporter
RIO DE JANEIRO, BRAZIL – The real fell for the third straight day, its lowest in five months, after the Central Bank’s decision to slash the interest rate to twelve percent on August 31st. Fears that the global economy may suffer another recession tempered demands for higher-yielding assets, further causing the real to depreciate 0.3 percent to 1.6452 per U.S. dollar on Monday.
Marcelo Fonseca, an economist with M. Safra & Co. in São Paulo, claimed that desires to cut borrowing costs by leveling interest rates will remain strong with the Central Bank as long as there are still fears about a looming debt crisis.
São Paulo based Bovespa, the benchmark Brazilian Stock Exchange, also fell early Monday, according to O Globo. Following the real’s decline and amidst ongoing anxieties of the public debt in Europe, the Bovespa Index closed down 2.71 percent at 54,998 points.
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