The Brazilian currency is down after the country's minimum wage was raised, which will cost the government an additional 4.77 billion reais in 2016, Bloomberg reports.
Additionally, Brazil faces a worsening recession and an ongoing campaign to impeach President Dilma Rousseff.
"The real is falling on the last day of trading of the year on a combination of the bad mood abroad with the negative prospects within the country," Joao Paulo de Gracia Correa, a foreign-exchange director at SLW Corretora de Valores, told Bloomberg. "We should continue to see volatility in currency trading in the near-term."
The real dropped by 3.7% to 4.0104 per dollar as of 2:03 p.m. in Sao Paulo, according to Bloomberg.
Based in Sao Paulo, Itau Unibanco offers a range of financial products and services to individual and corporate clients.