Brazilian Real Plunges To Record Low Of Five To Dollar

Brazil's currency plunged to a new record low Thursday, crossing the threshold of five to the dollar for the first time ever as the fallout of the coronavirus pandemic continued to wreak economic havoc.

The Brazilian real has hit a series of record lows in recent days as the impact of the pandemic has hit Latin America's largest economy.

But its drop below five to the dollar early in the day -- it shed 4.4 percent, to 5.028 -- is the first time it has crossed the psychologically important barrier since it was launched in 1994.

It later recovered some ground, and was trading at 4.9 to the dollar mid-morning.

The drop could be damaging for far-right President Jair Bolsonaro and his Economy Minister Paulo Guedes, who had said a week ago the real would only fall below five to the dollar "if we really mess up."

"It's a floating exchange rate. If we really mess up, it could go to that level," he said, seeking to calm fears over the impact of the virus.

Brazil has confirmed 52 coronavirus cases, with no deaths so far.

But the pandemic has hit the economy hard, largely because of the country's close ties with China, its biggest trading partner and top destination for its key commodity exports.

The government cut its 2020 economic growth forecast Wednesday by 0.3 percentage points, to 2.1 percent, and warned the fallout of the virus could end up shaving off even more.