FXStreet (Córdoba) - According to analysts from Rabobank the replacement of the Finance Minister will not help the Brazilian real, that is likely to continue to decline to record low levels against the US dollar during 2016. Key Quotes: “Levy has been replaced by Nelson Barbosa who was the Minister of Planning up until the change. Barbosa’s arrival was met by a sell-off in BRL with fears that the shift would lead to a laxer fiscal stance. Barbosa was quick to hit the wires and claim the contrary, stating that “The pledge to maintain fiscal stability remains the same”. “Despite these claims, we find it hard to see how further fiscal slippage can be avoided. Levy’s attempts were hampered and it is fair to say that Barbosa is unlikely to try and reign in the purse strings to the same degree. Indeed, political paralysis continues and while fiscal adjustments are delayed, Brazil’s footing continues to slip – we see it as just a matter of time before Moodys joins Fitch and S&P in giving the sovereign rating ‘junk’ status.” “In terms of the currency, we still view USD/BRL as cheap below 4 and expect the pair to trade at the 4.50 handle next year.” “Although we view BRL as the fourth most attractive carry currency globally, the chart shows that it has become less attractive and this itself has weighed on BRL. Indeed, the high interest rate in Brazil (SELIC at 14.25%) is one of the few supporting factors for BRL and this leaves it susceptible to overshoots on the downside when volatility rises (and thus vol. adjusted carry declines).” For more information, read our latest forex news.