Brazil's real slid to a fresh record low against the dollar on Friday, on track for one of its biggest monthly falls since the 2015-16 recession as traders tested the central bank's resolve not to intervene in the face of the depreciating exchange rate.

Against an increasingly gloomy backdrop for emerging market assets as the coronavirus crisis deepens, the dollar rose as high as 4.2790 reais on Friday, surpassing its previous all-time high of 4.2770 reais struck on Nov. 26 last year.

That brought the real's losses in January to nearly 6%, which would be its third-steepest monthly fall in over four years. The central bank intervened selling dollars on the spot market in August last year for the first time in over a decade as the real as the real slid, and waded in again in November.

Even though the real is at a new all time low, analysts at Morgan Stanley reckon the central bank will keep its powder dry for now. They cite three reasons: low volatility relative to other markets; low and declining inflation expectations, indicating a negligible "pass through" from the weak exchange rate; and relatively balanced investor positioning.

"The probability of the central bank stepping in remains low. Signaling from authorities suggest they are comfortable with (the real's) current levels," they wrote in a note to clients on Friday. Three-month implied dollar/real volatility, for example, last week hit a five-year low of 9%, and on Friday it had risen to 10%. But in August last year, when the central bank intervened, it was above 14%.

Meanwhile, a closely watched survey of economists this week showed 2020 inflation expectations falling to a new low of 3.47%, further below the central bank's official goal of 4.00%. The central bank's rate-setting committee known as Copom meets next week. The more benign inflation outlook has fueled expectations Copom will cut the benchmark Selic rate a quarter point to a new low of 4.25%.