Real makes shaky steps to recovery

The real slipped to 3.745 per dollar last Wednesday (November 6) following the failure of the city of Sao Paulo to make a debt payment of BRL3 billion ($837 million) to the federal government. The news prompted fears of state and municipal debt defaults. But federal and city officials were quick to dispel speculation, citing an agreement within the city’s contract with the government that allows it to delay payment.

Market participants have widely dismissed the real’s slip as an overreaction

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