Brazil's real slumped again on Friday to a new low against the dollar, falling through the 4.30 per dollar mark for the first time as traders tested the central bank's resolve not to intervene in the market to arrest its decline.

The real is on course for its sixth weekly decline in a row, its longest losing streak since the middle of last year when the central bank eventually acted in late August, selling dollars on the spot market for the first time in over a decade. The real fell as low as 4.31 per dollar on Friday and is now down 7% so far this year, one of the worst-performing emerging market currencies in the world.

The fall is part of a broader move - the MSCI Emerging Markets Currency Index is on track for its worst day since Aug. 26 - and implied volatility in the real is relatively contained, certainly much lower than last August. These are two good reasons why the central bank may remain on the sidelines, traders said. But conversely, the central bank's inaction only emboldens the speculators.

"Local and offshore funds are buying (dollars). They're testing the central bank," said one trader in Sao Paulo. The market's selling of the real comes even though the central bank signaled this week that its latest interest rate cut would be its last. In theory, the increase in market-based interest rates from traders unwinding bets of any more policy easing would support the currency.

But this hasn't happened. Speculative, short-term flows against the real have filled the void left by a lack of longer-term portfolio inflows from overseas investors for Brazilian assets, traders say.