Brazilian Real Falls as Global Crisis Sparks Capital Outflows

By Adriana Brasileiro

Oct. 10 (Bloomberg) -- Brazil's real fell as the global financial crisis deepened, prompting investors to pull money out of higher-yielding, emerging-market securities.

The real fell 1.2 percent to 2.3110 per dollar at 8:54 a.m. New York time, compared with 2.2826 per dollar yesterday. The real has lost 11.6 percent this week, prompting the central bank to sell dollars for the first time in five years, as financial institutions in Europe started to falter under the weight of the global credit crisis. It has sunk 33 percent from a nine-year high reached on Aug. 1.

The yield on Brazil's overnight futures contract for January 2009 delivery fell 1 basis point, or 0.01 percentage point, to 13.96 percent. The yield on Brazil's zero-coupon bond due in January 2010 rose 16 basis points to 15.06 percent, according to Banco Votorantim.

To contact the reporter on this story: Adriana Brasileiro in Rio de Janeiro at abrasileiro@bloomberg.net