The Brazilian real weakened sharply against the U.S. dollar on Wednesday, posting one of the biggest declines among emerging market currencies during the trading session.
The currency came under pressure after a report published by The Intercept Brasil alleged ties between Brazilian presidential candidate Flavio Bolsonaro and businessman Daniel Vorcaro, the former chief executive of Banco Master.
According to the report, the alleged connections renewed investor concerns surrounding the lender, which had previously faced controversy and regulatory scrutiny.
Following the news, the Brazilian real declined approximately 1.3% against the dollar, making it the weakest-performing major emerging market currency for the day.
Market analysts noted that political uncertainty and concerns involving the financial sector can increase volatility in Brazil’s currency markets, especially during periods of heightened investor sensitivity toward emerging economies.