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RIO DE JANEIRO, March 4 (Reuters) - The Brazilian real weakened sharply on Wednesday, hitting the level of 3 per dollar for the first time in over 10 years, after President Dilma Rousseff's austerity plan suffered a major setback in Congress.
The real lost more than 2 percent, briefly hitting the psychological-relevant level of 3 per dollar for the first time since August, 2004. It later traded around 2.995.
Upset over Rousseff's austerity measures, legislators unexpectedly threw out a presidential decree that would have raised payroll taxes and helped close a gaping hole in Brazil's budget.
Investors fear Brazil may suffer additional credit rating downgrades, possibly losing its investment grade, if the government fails reach its crucial fiscal savings target this year.
Reporting by Walter Brandimarte