Brazil currency don drop to di weakest level since e start 4 as dem dey discuss Lula fiscal measures

Brazil’s real for Wednesday don fall to him weakest level against di dollar since di currency start for 1994, bicos investors dey vex with President Luiz Inácio Lula da Silva efforts to cut down government spending.

One bill wey Lula support wey wan reduce 70-billion-real ($11 billion) for government spending don dey debated for Brazil’s lower house of Congress.

But some market pipo don talk say e no dey enough to take help Brazil finances.

Di real lose 2.8% of him value against di U.S. dollar for Wednesday, depreciating to 6.26 per dollar.

Na di weakest wey di currency don be for di nominal terms since dem don adopt am for economy wey get history of boom-and-bust cycles and high inflation periods.

Dis year, e don lose nearly 23% of him value against di U.S. currency.

Brazil’s lower house late Tuesday pass some parts of di bill wey no too cause wahala, but di key parts like restriction for increase for minimum wage neva still com up for vote.

Di Senate also need to vote for wetin di lower house approve, and Congress go close for Friday.

Brazil’s central bank don try plenty times to intervene for local currency markets to stop di real slide but so far e no really work well.

Economists dem don talk say dis weakness go increase cost of Brazilian imports and fit trigger inflation by January.

“Di government send package wey dem see as insufficient, and e go soften down for inside di Congress.”

“E dey also com with di measure to take increase spending through income tax,” analyst Mario Sérgio Lima from Medley Advisors tell The Associated Press.

“Di real at 6 per dollar look acceptable, but wen e near 6.30 na wahala.”

Lula, wey dey recover from surgery to stop brain bleed, tell TV Globo on Sunday say him administration dey fiscally responsible and him no too dey concern about wetin dey happen for financial markets.

“No be market suppose dey worry about government spending na our administration be dat.”

“If I no cut down spending, if I spend more than I get, na poor pipo go suffer am,” di Brazilian president talk.

Brazil’s Economy Minister Fernando Haddad talk say di steep depreciation of dia real no dey reflect wetin dey happen for kontri economy, him com dey note say inflation and unemployment figures dey improve.

“Some pipo dey talk speculation including respectable journalists,” Haddad tell journalists inside Brasilia without providing more details.

“Our currency float and at dis moment wen some things de pending for Congress, there be atmosphere of uncertainty wey make di currency float around. But I believe say e go find him ground.”

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