Brazil Increase of IOF ‘Should Not Be Ruled Out,’ JPMorgan Says - Bloomberg.com

Brazil Increase of IOF ‘Should Not Be Ruled Out,’ JPMorgan Says

Nov. 19 (Bloomberg) -- Brazil’s so-called IOF tax on the purchase of equity and fixed-income assets by foreigners may be expanded further to fight an appreciation in the currency, JPMorgan Chase & Co. said.

The extension of the tax to the creation of new depositary receipts, announced yesterday, shows that the IOF remains the key instrument to fight the real’s appreciation, and therefore IOF brackets that are higher or broader in scope should not be ruled out, wrote Sao Paulo-based Julio C. Callegari in a note.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.
Last Updated: November 19, 2009 07:31 EST"