SAO PAULO, March 8 (Reuters) - The Brazilian real sank to a session low on Wednesday on speculation that the government could raise taxes on foreign exchange transactions to deliver on this year's fiscal target.
Bloomberg News reported the move is "among the options being considered" by the Brazilian government, citing a source with direct knowledge of the issue.
A spokeswoman for the Finance Ministry declined to comment immediately on the report.
The currency weakened as much as 1.9 percent to 3.1806 per U.S. dollar after the report before paring losses to around 1.2 percent.
Finance Minister Henrique Meirelles had said on Tuesday that Brazil could raise taxes or promote fresh spending cuts if necessary. He added there was no possibility of revising the 143.1 billion reais ($45.3 billion) primary deficit goal, which excludes interest payments.
Brazil last raised the so-called IOF financial tax on the purchase of foreign currencies in cash in May to 1.1 percent.
$1 = 3.1579 reais Reporting by Bruno Federowski