SAO PAULO, April 25 Reuters The Brazilian real has returned to the list of worst currencies among its peers with two sessions of heavy losses, suffering a blow from the rallying dollar after benefiting from a crowded carry trade, with increased tensions in Brasilia giving traders a reason to get out.

On Monday, the real fell 1.44, after a 3.91 tumble on Friday, when its depreciation jumped to the highest levels since the world plunged into the coronavirus pandemic two years ago.

The U.S. dollar39;s rally has been globally buoyed by risks of a stronger monetary tightening by the Federal Reserve, but domestic issues have amplified the impact on the Brazilian currency following its impressive gains since the year began.

Last Thursday, President Jair Bolsonaro announced he would pardon an allied federal congressman whom the Supreme Court had sentenced to nearly nine years in prison, raising tensions between the nation39;s executive and judiciary during an election year.

Concerns about increased expenditures as Bolsonaro seeks reelection are also weighing on prospects while investors try to map fiscal risks by whoever takes office in 2023.

Andre Perfeito, chief economist at Necton Investimentos, also mentioned the recent tension between Supreme Court minister Luis Roberto Barroso and the Armed Forces over the fairness of electronic voting machines.

This issue creates a climate of strong instability for the October presidential election, and this is central to many…