Brazil's real fell again on Friday to end a volatile month of record lows and central bank intervention down more than 5%, its second biggest monthly decline this year behind August.
The real's slide to 4.24 per dollar took it back towards the record low of 4.2770 per dollar on Tuesday, when the central bank waded into what it said was a dysfunctional and illiquid market for the first time since August.
The central bank intervened by selling dollars on the spot market for the first time in a decade in August, when the real suffered its biggest monthly fall in four years and ended down more than 8%.
Any support the real got from four rounds of dollar sales and an upward revision to Brazilian export figures this week also proved to be fleeting. A day after posting one of its biggest gains of the year, the real fell back again on Friday. Goldman Sachs analysts said the currency's recent steep decline may point to an imminent rebound, but advised investors to remain cautious.
"Real weakness may be a feature (rather than a bug) of a backdrop that includes subdued inflation, low nominal and real carry, and a renewed deterioration in Brazil's external balances," they wrote in a note to clients on Friday.
"So the bar for outright real longs is higher than in the past, and a more significant and sustained constructive story on the real likely depends on a larger move lower in the dollar, which is not our base case for now," they said.
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