Brazil's president, Fernando Henrique Cardoso, has tried to calm fears over the country's economy as its currency plunged anew.

The Brazilian real slumped almost 3% against the dollar during Wednesday's trading - an extremely heavy fall for a currency.

The confidence of foreign investors has been shaken by the uncertainties surrounding the country's October elections and doubts about the government's ability to rollover maturing debts.

But Mr Cardoso tried to brush aside analogies with crisis-ridden Argentina, saying the Brazilian authorities were "aware of their responsibility to help macroeconomic conditions function normally".

"We are convinced of the good fundamentals of our economy and the public responsibility of our political leaders," he added, speaking on national television.

Changing course

The popularity of the leftist leader Luiz Inacio de Silva in the polls - and the economic policies he advocates - is thought to be the root of the rising concern.

Stable economic policy over the coming months is especially crucial to Brazil given its need to rollover debt through to next year.

Many investors fear Brazil may change its economic course towards a style of more state intervention.

That could further bloat the country's public debt and alienate international money lenders.

'No cause for alarm'

As well as the currency falls, the country's risk premium - a key gauge of investor sentiment - soared.

Mr Cardoso said the market turmoil would be analysed "calmly, serenely and firmly".

In another move to help soothe investor fears, the senate has also approved the extension of a tax on financial transactions aimed at helping the government avoid a huge potential budget gap.

Despite the growing fears over the future, analysts said the fundamentals of the Brazilian economy remained changed.

"There is no sense on our part that a sense of alarm is needed," World Bank regional representative David de Ferranti said.