Brazil has reduced a financial transactions tax on currency derivatives
to zero after its currency, the real, hit four-year lows against the
dollar on Wednesday.
The measure was the second such move in a
week to dismantle currency controls as the government sounds a rapid
retreat from its earlier “currency war” against foreign capital inflows.
The
1 per cent tax, which applied to short dollar positions in the futures
market that were essentially a bet on a stronger real, was considered
one of the most onerous of Brazil’s currency controls when it was
introduced in July 2011.
Showing posts with label BRL Currency. Show all posts
Showing posts with label BRL Currency. Show all posts
Thursday, June 13, 2013
Monday, May 23, 2011
Largest Traders Bet Real Bulls to Beat Mantega
The world’s largest currency traders are recommending their clients bet Brazilian Finance Minister Guido Mantega’s success in stemming gains in the real will be short-lived as foreign investment picks up.
Wednesday, April 27, 2011
Buy Brazil Inflation-Linked Bonds, Swiss & Global Says
Brazilian inflation-linked bonds may appreciate as the country’s economy grows and its credit profile improves, according to Alessandro Ghidini from Swiss & Global Asset Management Ltd.
The real yield on inflation-linked bonds, whose principle is adjusted to compensate for consumer price rises, may fall by about 1 percentage point over the next year or so as the bonds rise in value,
The real yield on inflation-linked bonds, whose principle is adjusted to compensate for consumer price rises, may fall by about 1 percentage point over the next year or so as the bonds rise in value,
Wednesday, September 15, 2010
Meirelles Dollar Loan Rates Top Libor by Most in Six Months
Brazilian dollar-based loan rates are climbing to a six-month high relative to those overseas as central bank President Henrique Meirelles boosts purchases of the greenback to slow the real’s world-beating rally.
Contracts due in January known as cupom cambial, a measure of annual dollar borrowing costs in Brazil, rose to 1.89 percent on Sept. 13, the highest level since July 23. The rate has jumped 11 basis points, or 0.11 percentage point, since Sept. 8, when the central bank started holding two daily auctions to buy dollars, helping create a shortage of the U.S. currency in the Brazilian loan market.
Contracts due in January known as cupom cambial, a measure of annual dollar borrowing costs in Brazil, rose to 1.89 percent on Sept. 13, the highest level since July 23. The rate has jumped 11 basis points, or 0.11 percentage point, since Sept. 8, when the central bank started holding two daily auctions to buy dollars, helping create a shortage of the U.S. currency in the Brazilian loan market.
Friday, March 5, 2010
Mantega Says Brazil Currency Situation Not ‘Ideal’
Mantega Says Brazil Currency Situation Not ‘Ideal’
March 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said today the country’s currency situation isn’t “ideal,” signaling the government may step up interventions in the market as it seeks to temper the real’s gains.
“We have a relatively stable situation now,” Mantega said today in a speech from Sao Paulo. “It’s not an ideal situation. We haven’t resolved the competitiveness issue.”
March 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said today the country’s currency situation isn’t “ideal,” signaling the government may step up interventions in the market as it seeks to temper the real’s gains.
“We have a relatively stable situation now,” Mantega said today in a speech from Sao Paulo. “It’s not an ideal situation. We haven’t resolved the competitiveness issue.”
Monday, February 1, 2010
Goldman Sachs Says Buy Brazil’s Real Following Tumble
Goldman Sachs Says Buy Brazil’s Real Following Tumble
Feb. 1 (Bloomberg) -- Goldman Sachs Group Inc. recommended investors buy Brazil’s real, saying the country’s “strong” economic growth will spark a rebound after it posted the worst rout among major currencies last month.
“Brazil’s growth has remained strong and is accelerating,” currency analysts including London-based Thomas Stolper wrote in a research note to clients. “Together with cyclical assets moving back to a more constructive view of the world, a more hawkish central bank stance could support a return of the Brazilian real towards the lower end of the recent trading ranges.”
Goldman Sachs, which called the real the world’s most “overvalued” currency as recently as Dec. 15, recommended clients buy it at 1.8870 per dollar, predicting the real will advance to 1.75. Investors should exit the trade if the real were to slide to 1.94, the Goldman Sachs analysts said.
Feb. 1 (Bloomberg) -- Goldman Sachs Group Inc. recommended investors buy Brazil’s real, saying the country’s “strong” economic growth will spark a rebound after it posted the worst rout among major currencies last month.
“Brazil’s growth has remained strong and is accelerating,” currency analysts including London-based Thomas Stolper wrote in a research note to clients. “Together with cyclical assets moving back to a more constructive view of the world, a more hawkish central bank stance could support a return of the Brazilian real towards the lower end of the recent trading ranges.”
Goldman Sachs, which called the real the world’s most “overvalued” currency as recently as Dec. 15, recommended clients buy it at 1.8870 per dollar, predicting the real will advance to 1.75. Investors should exit the trade if the real were to slide to 1.94, the Goldman Sachs analysts said.
Thursday, January 7, 2010
Brazil Carry-Trade Flows to Climb, StanChart Says
Jan. 7 (Bloomberg) -- Carry-trade investment flows into Brazil will climb this year as traders tap into central bank rate increases that will likely send benchmark borrowing costs above 10 percent, according to Standard Chartered Plc.
Carry trades, in which investors buy higher-yielding assets with money borrowed in nations with lower rates, will pick up as Brazil lifts the overnight interbank target from a record low of 8.75 percent to stem inflation as the economy rebounds, said Mike Moran, a senior currency strategist at Standard Chartered.
Moran, one of the most accurate forecasters in a Bloomberg survey of the real’s world-beating rally last year, predicts these flows will help the real advance to an 11-year high of 1.55 per dollar by year-end. That contrasts with the 1.75-per- dollar year-end call from BNP Paribas SA, the best Brazil real predictor last year among forecasts made at the end of 2008.
“We see stronger growth and higher rates boosting carry trades,” Moran said in a telephone interview from New York.
Carry trades, in which investors buy higher-yielding assets with money borrowed in nations with lower rates, will pick up as Brazil lifts the overnight interbank target from a record low of 8.75 percent to stem inflation as the economy rebounds, said Mike Moran, a senior currency strategist at Standard Chartered.
Moran, one of the most accurate forecasters in a Bloomberg survey of the real’s world-beating rally last year, predicts these flows will help the real advance to an 11-year high of 1.55 per dollar by year-end. That contrasts with the 1.75-per- dollar year-end call from BNP Paribas SA, the best Brazil real predictor last year among forecasts made at the end of 2008.
“We see stronger growth and higher rates boosting carry trades,” Moran said in a telephone interview from New York.
Monday, December 14, 2009
Brazil Corporate Bond Sales to Rise, Coutinho Says
Dec. 14 (Bloomberg) -- Brazil’s local-currency corporate debt market is poised for a “golden year” in 2010 as investor appetite for longer-maturity real-denominated assets increases, said Luciano Coutinho, president of the state development bank.
Brazil has “great potential” for a secondary market for corporate bonds, and BNDES, as the development bank is known, is prepared to help build it, Coutinho said. Larger Brazilian companies with “good” credit ratings will be able to issue real-denominated debt next year in addition to selling shares, Coutinho said.
“We expect 2010 will be a golden year for the development of the corporate bond market,” Coutinho told reporters in Sao Paulo. “The capital markets have robust and immediate opportunities for expansion.”
more: Brazil Corporate Bond Sales to Rise, Coutinho Says
Brazil has “great potential” for a secondary market for corporate bonds, and BNDES, as the development bank is known, is prepared to help build it, Coutinho said. Larger Brazilian companies with “good” credit ratings will be able to issue real-denominated debt next year in addition to selling shares, Coutinho said.
“We expect 2010 will be a golden year for the development of the corporate bond market,” Coutinho told reporters in Sao Paulo. “The capital markets have robust and immediate opportunities for expansion.”
more: Brazil Corporate Bond Sales to Rise, Coutinho Says
Friday, December 11, 2009
Brazil’s Real to Surpass 1.50 Per Dollar, Booth Says
Dec. 11 (Bloomberg) -- Brazil’s real may appreciate “way past” 1.50 per U.S. dollar next year as investors flock to Latin America’s largest economy, said Ashmore Group Plc’s Jerome Booth.
Brazil’s benchmark interest rate may climb by 2 percentage points next year from a record low of 8.75 percent, Booth, chief of research at the London-based firm that oversees $31 billion of assets, said in a telephone interview.
“Brazilian rates are going to go up, but they’re not going to go up the 400 basis points that some people think,” Booth said. “The currency I would expect to rally considerably. Way past 1.50.”
...“The perception of risk needs changing radically,” Booth said. “The investor that is thinking of maybe putting 5 percent in emerging markets needs to rethink and realize that being 95 percent in developed markets is very risky.”
more: Brazil’s Real to Surpass 1.50 Per Dollar, Booth Says
Brazil’s benchmark interest rate may climb by 2 percentage points next year from a record low of 8.75 percent, Booth, chief of research at the London-based firm that oversees $31 billion of assets, said in a telephone interview.
“Brazilian rates are going to go up, but they’re not going to go up the 400 basis points that some people think,” Booth said. “The currency I would expect to rally considerably. Way past 1.50.”
...“The perception of risk needs changing radically,” Booth said. “The investor that is thinking of maybe putting 5 percent in emerging markets needs to rethink and realize that being 95 percent in developed markets is very risky.”
more: Brazil’s Real to Surpass 1.50 Per Dollar, Booth Says
Sunday, December 6, 2009
Brazil Treasury Secretary: Overseas Bond Likely In December - WSJ.com
Brazil Treasury Secretary: Overseas Bond Likely In December
SAO PAULO (Dow Jones)--Brazil's government likely will issue another overseas bond before the end of the year, Treasury Secretary Arno Augustin said Friday.
'We are looking to build a better yield curve and improve the quality of our debt management,' Augustin said in a telephone interview.
He said the bond likely would be denominated in U.S. dollars and carry a 10-year term. He said it was possible the government would reopen its 2019 bond. He didn't offer any idea about the size of the offer.
Augustin said the government was also studying a possible overseas bond denominated in the Brazilian real. 'This is on our agenda,' he said. 'However, it is not likely for the short term since rates for dollar-denominated bonds are so good right now. A real-denominated issue is possible in 2010.'
Brazil has accessed the international debt market four times this year. In January, Brazil issued $1.025 billion in global bonds due in 2019. The bonds were sold at a yield of 6.127%. In May, it reopened the operation, raising another $750 million at a yield of 5.8%.
In July, the treasury obtained $525 million from the issue of an overseas bond due in 2037, with a yield of 6.45%. At the end of September, it raised $1.27 billion with the issue of a global bond due 2041, with a yield of 5.8%.
In the September operation, the government took advantage of a sovereign upgrade by Moody's, tapping the international bond market to fill out its debt curve.
In September, Moody's Investors Service raised Brazil's sovereign credit rating to Baa3, an investment-grade rating, more than a year after Standard & Poor's and Fitch Rating did so.
Brazil has issued real-denominated bonds overseas before, most recently in May 2008. At that time, it raised 750 million Brazilian reals ($441 million) from the reopening of an existing 2028 bond.
'Given the current international environment of low interest rates, Brazil's government will continue its policy of repurchasing overseas debt,' Augustin said.
In 2008, Brazil repurchased overseas bonds with total face value of $1.2 billion.
'We would like to buy more, but investors seem like they want to hold on to their Brazilian paper,' Augustin said.
The treasury secretary said Brazil's government will release its annual domestic debt management plan at the beginning of 2010. 'I can already tell you at least one thing about the plan,' Augustin said. 'We will aim to reduce the debt-to-GDP ratio next year.'
The debt-to-GDP ratio was 44.8% as of Oct. 31, up from 36.0% at the end of 2008. Brazil's public sector debt rose this year because of the global recession, which caused a decline in tax revenue.
But Brazil's economy is expected to rebound in 2010. Most economists are expecting growth of 5% next year after an expansion of no more than 1% for 2009.
Regarding Brazil's volatile foreign exchange market, Augustin said, 'We are closely monitoring the exchange rate, and we will be ready to correct any distortions.'
The Brazilian real has gained about 35% against the U.S. dollar so far in 2009, causing worries for exporters.
Augustin said Brazil's government will continue its policy of systematic purchases of U.S. dollars in order to build foreign reserves. 'This policy will continue, managed by the central bank,' he said.
Brazil's reserves stood at $238 billion at the end of November, up $5 billion from the previous month.
-By Rogerio Jelmayer, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
SAO PAULO (Dow Jones)--Brazil's government likely will issue another overseas bond before the end of the year, Treasury Secretary Arno Augustin said Friday.
'We are looking to build a better yield curve and improve the quality of our debt management,' Augustin said in a telephone interview.
He said the bond likely would be denominated in U.S. dollars and carry a 10-year term. He said it was possible the government would reopen its 2019 bond. He didn't offer any idea about the size of the offer.
Augustin said the government was also studying a possible overseas bond denominated in the Brazilian real. 'This is on our agenda,' he said. 'However, it is not likely for the short term since rates for dollar-denominated bonds are so good right now. A real-denominated issue is possible in 2010.'
Brazil has accessed the international debt market four times this year. In January, Brazil issued $1.025 billion in global bonds due in 2019. The bonds were sold at a yield of 6.127%. In May, it reopened the operation, raising another $750 million at a yield of 5.8%.
In July, the treasury obtained $525 million from the issue of an overseas bond due in 2037, with a yield of 6.45%. At the end of September, it raised $1.27 billion with the issue of a global bond due 2041, with a yield of 5.8%.
In the September operation, the government took advantage of a sovereign upgrade by Moody's, tapping the international bond market to fill out its debt curve.
In September, Moody's Investors Service raised Brazil's sovereign credit rating to Baa3, an investment-grade rating, more than a year after Standard & Poor's and Fitch Rating did so.
Brazil has issued real-denominated bonds overseas before, most recently in May 2008. At that time, it raised 750 million Brazilian reals ($441 million) from the reopening of an existing 2028 bond.
'Given the current international environment of low interest rates, Brazil's government will continue its policy of repurchasing overseas debt,' Augustin said.
In 2008, Brazil repurchased overseas bonds with total face value of $1.2 billion.
'We would like to buy more, but investors seem like they want to hold on to their Brazilian paper,' Augustin said.
The treasury secretary said Brazil's government will release its annual domestic debt management plan at the beginning of 2010. 'I can already tell you at least one thing about the plan,' Augustin said. 'We will aim to reduce the debt-to-GDP ratio next year.'
The debt-to-GDP ratio was 44.8% as of Oct. 31, up from 36.0% at the end of 2008. Brazil's public sector debt rose this year because of the global recession, which caused a decline in tax revenue.
But Brazil's economy is expected to rebound in 2010. Most economists are expecting growth of 5% next year after an expansion of no more than 1% for 2009.
Regarding Brazil's volatile foreign exchange market, Augustin said, 'We are closely monitoring the exchange rate, and we will be ready to correct any distortions.'
The Brazilian real has gained about 35% against the U.S. dollar so far in 2009, causing worries for exporters.
Augustin said Brazil's government will continue its policy of systematic purchases of U.S. dollars in order to build foreign reserves. 'This policy will continue, managed by the central bank,' he said.
Brazil's reserves stood at $238 billion at the end of November, up $5 billion from the previous month.
-By Rogerio Jelmayer, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com"
Thursday, November 26, 2009
Governo pretende ousar na liberalização cambial
Medidas em estudo avançado no governo devem permitir maior internacionalização dos bancos que operam no Brasil
A nova rodada de liberalização cambial, em estudo avançado no governo, deve contemplar medidas mais ousadas, que facilitem a saída de poupança doméstica para aplicações no exterior e permitam maior internacionalização dos bancos que operam no Brasil.
As propostas que estão sob avaliação de especialistas do governo são: autorizar os bancos brasileiros a emprestar a empresas no exterior recursos captados no mercado interno; remover entraves para que os bancos no Brasil operem com derivativos no mercado internacional; ampliar ou mesmo extinguir os limites para que os fundos multimercados apliquem no mercado externo; e ampliar o teto de aplicação dos fundos de pensão, recentemente autorizados a investir até 10% do patrimônio líquido em fundos de investimentos no exterior.
Esse conjunto de medidas - que deverá ser acompanhado por uma série de revogações de circulares e resoluções do Conselho Monetário Nacional (CMN) que instituíram regras cambiais próprias de uma economia carente de moeda estrangeira - representa uma segunda etapa no processo de liberalização do mercado de câmbio no país. As primeiras medidas se destinaram, em anos recentes, a facilitar o ingresso de moeda estrangeira no Brasil. Agora, as ações do governo estão dirigidas para a simplificação da saída de recursos.
Para que os bancos que operam no país possam emprestar a empresas no exterior, sejam as nacionais que se internacionalizam ou as estrangeiras, será preciso extinguir os mandamentos da circular nº 24, do Banco Central, que desde fevereiro de 1966 impõe, num só artigo, a proibição para que essas instituições emprestem poupança doméstica fora do país. O artigo diz: ' Comunicamos que é expressamente vedado às instituições financeiras, por qualquer forma, aplicar ou promover a colocação no exterior de recursos coletados no país'.
A circular nº 24 é parte da própria história do Banco Central, criado pela lei nº 4.595, em 1964. Na avaliação de fontes do governo, essa regra não condiz com a necessidade de o sistema financeiro doméstico acompanhar a internacionalização das empresas brasileiras.
Valor Econômico > Impresso > Caderno A
Claudia Safatle, de Brasília
26/11/2009
Governo pretende ousar na liberalização cambial
Nov. 26 (Bloomberg) -- The Brazilian government is planning measures to facilitate private investments abroad and to give local banks more freedom to make international transactions, Valor Economico reported, without saying where it got the information.
Authorities are evaluating proposals such as allowing local banks to lend abroad and to operate derivatives in the international markets, the Sao Paulo-based newspaper said. Other rules under consideration are ending limits for hedge funds to invest abroad and raising the limit for pension funds to buy foreign assets.
The proposals are part of a broader government effort to liberalize foreign-exchange transactions, Valor reported.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t immediately returned.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 26, 2009 05:17 EST
A nova rodada de liberalização cambial, em estudo avançado no governo, deve contemplar medidas mais ousadas, que facilitem a saída de poupança doméstica para aplicações no exterior e permitam maior internacionalização dos bancos que operam no Brasil.
As propostas que estão sob avaliação de especialistas do governo são: autorizar os bancos brasileiros a emprestar a empresas no exterior recursos captados no mercado interno; remover entraves para que os bancos no Brasil operem com derivativos no mercado internacional; ampliar ou mesmo extinguir os limites para que os fundos multimercados apliquem no mercado externo; e ampliar o teto de aplicação dos fundos de pensão, recentemente autorizados a investir até 10% do patrimônio líquido em fundos de investimentos no exterior.
Esse conjunto de medidas - que deverá ser acompanhado por uma série de revogações de circulares e resoluções do Conselho Monetário Nacional (CMN) que instituíram regras cambiais próprias de uma economia carente de moeda estrangeira - representa uma segunda etapa no processo de liberalização do mercado de câmbio no país. As primeiras medidas se destinaram, em anos recentes, a facilitar o ingresso de moeda estrangeira no Brasil. Agora, as ações do governo estão dirigidas para a simplificação da saída de recursos.
Para que os bancos que operam no país possam emprestar a empresas no exterior, sejam as nacionais que se internacionalizam ou as estrangeiras, será preciso extinguir os mandamentos da circular nº 24, do Banco Central, que desde fevereiro de 1966 impõe, num só artigo, a proibição para que essas instituições emprestem poupança doméstica fora do país. O artigo diz: ' Comunicamos que é expressamente vedado às instituições financeiras, por qualquer forma, aplicar ou promover a colocação no exterior de recursos coletados no país'.
A circular nº 24 é parte da própria história do Banco Central, criado pela lei nº 4.595, em 1964. Na avaliação de fontes do governo, essa regra não condiz com a necessidade de o sistema financeiro doméstico acompanhar a internacionalização das empresas brasileiras.
Valor Econômico > Impresso > Caderno A
Claudia Safatle, de Brasília
26/11/2009
Governo pretende ousar na liberalização cambial
Nov. 26 (Bloomberg) -- The Brazilian government is planning measures to facilitate private investments abroad and to give local banks more freedom to make international transactions, Valor Economico reported, without saying where it got the information.
Authorities are evaluating proposals such as allowing local banks to lend abroad and to operate derivatives in the international markets, the Sao Paulo-based newspaper said. Other rules under consideration are ending limits for hedge funds to invest abroad and raising the limit for pension funds to buy foreign assets.
The proposals are part of a broader government effort to liberalize foreign-exchange transactions, Valor reported.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t immediately returned.
To contact the reporter responsible for this story: Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 26, 2009 05:17 EST
Monday, November 16, 2009
Brazil Real 7.2% Undervalued Even After Rally, BofA Says
Nov. 16 (Bloomberg) -- Brazil’s real, the best- performing major currency this year, is undervalued by 7.2 percent against the dollar based on the nation’s rising exports and higher savings, Bank of America Corp. said.
Emerging-market currencies are “broadly undervalued” against the dollar, with Latin America the most undervalued region in the world, Bank of America strategists wrote in a note to clients.
The Brazilian currency, which has gained 35 percent this year, rose 0.6 percent to 1.7126 against the dollar at 11:22 a.m. New York time. The real should appreciate to 1.60 per dollar in two to three years, Benoit Anne, the London-based head of emerging market foreign-currency and debt strategy at Bank of America, said by phone today.
“In nominal terms, the real is still undervalued,” Anne said, citing an improving current account and excess savings. “We think the real should strengthen over the long term based on our model.”
... more: Brazil Real 7.2% Undervalued Even After Rally, BofA Says
Emerging-market currencies are “broadly undervalued” against the dollar, with Latin America the most undervalued region in the world, Bank of America strategists wrote in a note to clients.
The Brazilian currency, which has gained 35 percent this year, rose 0.6 percent to 1.7126 against the dollar at 11:22 a.m. New York time. The real should appreciate to 1.60 per dollar in two to three years, Benoit Anne, the London-based head of emerging market foreign-currency and debt strategy at Bank of America, said by phone today.
“In nominal terms, the real is still undervalued,” Anne said, citing an improving current account and excess savings. “We think the real should strengthen over the long term based on our model.”
... more: Brazil Real 7.2% Undervalued Even After Rally, BofA Says
Friday, November 13, 2009
Dollar Overwhelms Central Banks From Brazil to Korea (Update1) - Bloomberg.com
By Oliver Biggadike and Matthew Brown
Nov. 13 (Bloomberg) -- Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle."...
‘Suffered Tremendously’
Brazil’s real is up 1.6 percent this month, even after imposing a tax in October on foreign stock and bond investments and increasing foreign reserves by $9.5 billion in October in an effort to curb the currency’s appreciation. The real has risen 33 percent this year.
“We have to be careful that our exchange rate doesn’t appreciate too much as to deindustrialize the country,” Marcos Verissimo, chief of staff at Brazil’s state development bank known as BNDES, said yesterday at a conference in Sao Paulo. “The capital goods industry has suffered tremendously.”....
“The dollar is weakening because the U.S. has the lowest short-term interest rates in the world will be the sell side of the carry trade as long as that remains true,” Chris Low, chief economist at FTN Financial in New York, wrote in a note to clients yesterday.....
‘Hard to Fight’
Brazil’s economy emerged from a recession in the second quarter, swinging to a 1.9 percent expansion after six months of contraction, a Sept. 11 report from the statistics agency showed. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, pushed up consumer spending and helped Latin America’s largest economy rebound from the global financial crisis.
“I hear a lot of noise reflecting the government’s discomfort with the exchange rate, but it is hard to fight this,” said Rodrigo Azevedo, the monetary policy director of Brazil’s central bank from 2004 to 2007. “There is very little Brazil can do,” said Azevedo, who runs $1.8 billion at JGP SA in Rio de Janeiro, in an Oct. 16 interview.
To contact the reporter on this story:
Oliver Biggadike in New York at obiggadike@bloomberg.net
Matthew Brown in London at brown42@bloomberg.net
Last Updated: November 13, 2009 01:34 EST
Dollar Overwhelms Central Banks From Brazil to Korea
Nov. 13 (Bloomberg) -- Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle."...
‘Suffered Tremendously’
Brazil’s real is up 1.6 percent this month, even after imposing a tax in October on foreign stock and bond investments and increasing foreign reserves by $9.5 billion in October in an effort to curb the currency’s appreciation. The real has risen 33 percent this year.
“We have to be careful that our exchange rate doesn’t appreciate too much as to deindustrialize the country,” Marcos Verissimo, chief of staff at Brazil’s state development bank known as BNDES, said yesterday at a conference in Sao Paulo. “The capital goods industry has suffered tremendously.”....
“The dollar is weakening because the U.S. has the lowest short-term interest rates in the world will be the sell side of the carry trade as long as that remains true,” Chris Low, chief economist at FTN Financial in New York, wrote in a note to clients yesterday.....
‘Hard to Fight’
Brazil’s economy emerged from a recession in the second quarter, swinging to a 1.9 percent expansion after six months of contraction, a Sept. 11 report from the statistics agency showed. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, pushed up consumer spending and helped Latin America’s largest economy rebound from the global financial crisis.
“I hear a lot of noise reflecting the government’s discomfort with the exchange rate, but it is hard to fight this,” said Rodrigo Azevedo, the monetary policy director of Brazil’s central bank from 2004 to 2007. “There is very little Brazil can do,” said Azevedo, who runs $1.8 billion at JGP SA in Rio de Janeiro, in an Oct. 16 interview.
To contact the reporter on this story:
Oliver Biggadike in New York at obiggadike@bloomberg.net
Matthew Brown in London at brown42@bloomberg.net
Last Updated: November 13, 2009 01:34 EST
Dollar Overwhelms Central Banks From Brazil to Korea
View Waldemar Jezler's profile
Thursday, November 12, 2009
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Nov. 12 (Bloomberg) -- Economist Emilio Garofalo Filho left the Brazilian central bank to work at the Finance Ministry, Valor Economico reported, without saying where it got the information.
Finance Minister Guido Mantega invited Garofalo, 56, to help design policies to contain the local currency’s appreciation against the dollar, according to the newspaper.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t answered before regular business hours.
To contact the reporter responsible for this story:
Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 12, 2009 04:51 EST
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Finance Minister Guido Mantega invited Garofalo, 56, to help design policies to contain the local currency’s appreciation against the dollar, according to the newspaper.
Calls by Bloomberg News to the Finance Ministry and the central bank weren’t answered before regular business hours.
To contact the reporter responsible for this story:
Camila Fontana in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 12, 2009 04:51 EST
Brazil Currency Specialist to Join Finance Ministry, Valor Says
Wednesday, November 11, 2009
Brazil Real May Rally 10% to 10-Year High: Technical Analysis
Nov. 11 (Bloomberg) -- Brazil’s real, the best-performing major currency in the world this year, may rally 10 percent to a 10-year high because government measures aren’t enough to stem gains, said Phil Roberts, a technical analyst at Barclays Plc.
The real will take out a decade high of 1.5545 per dollar reached in August 2008, a month before global credit markets seized up, Roberts said. He said that should the real begin to falter and decline to 1.7810 per dollar, it would signal that the rally that began in March would be ending.
The real has climbed 35 percent this year, more than all currencies Bloomberg tracks against the dollar after the Seychelles rupee. The real weakened 0.3 percent today to 1.7175 per dollar at 11:16 a.m. in New York.
This rally is “not over,” Roberts said in an interview from London. “Attempts to stop the appreciation of the real will have to be stronger.” ....
more: Brazil Real May Rally 10% to 10-Year High: Technical Analysis
To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net
Last Updated: November 11, 2009 11:32 EST
The real will take out a decade high of 1.5545 per dollar reached in August 2008, a month before global credit markets seized up, Roberts said. He said that should the real begin to falter and decline to 1.7810 per dollar, it would signal that the rally that began in March would be ending.
The real has climbed 35 percent this year, more than all currencies Bloomberg tracks against the dollar after the Seychelles rupee. The real weakened 0.3 percent today to 1.7175 per dollar at 11:16 a.m. in New York.
This rally is “not over,” Roberts said in an interview from London. “Attempts to stop the appreciation of the real will have to be stronger.” ....
more: Brazil Real May Rally 10% to 10-Year High: Technical Analysis
To contact the reporter on this story: Tal Barak Harif in New York at tbarak@bloomberg.net
Last Updated: November 11, 2009 11:32 EST
Tuesday, November 10, 2009
Brazil Investigating Investment Tax Loopholes, Estado Reports
Nov. 10 (Bloomberg) -- Brazil’s Finance Ministry is investigating possible loopholes used by investors to avoid paying a new tax on foreign purchases of stocks and bonds, O Estado de Sao Paulo reported, citing an interview with a government official who declined to be identified.
The Finance Ministry is inclined to raise the tax rate from 2 percent and at the same time to eliminate the tax on purchases of stocks in initial public offerings, the person told Estado.
The Finance Ministry press office didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: November 10, 2009 05:02 EST
Brazil Investigating Investment Tax Loopholes, Estado Reports - Bloomberg.com
The Finance Ministry is inclined to raise the tax rate from 2 percent and at the same time to eliminate the tax on purchases of stocks in initial public offerings, the person told Estado.
The Finance Ministry press office didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter responsible for this story: Camila Fontana at cfontana@bloomberg.net
Last Updated: November 10, 2009 05:02 EST
Brazil Investigating Investment Tax Loopholes, Estado Reports - Bloomberg.com
Friday, November 6, 2009
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports
Nov. 6 (Bloomberg) -- Brazil’s Finance Minister Guido Mantega may exempt initial public offerings from a new 2 percent tax on foreign inflows while increasing the levy on other transactions, Estado reported, without saying how it got the information.
An increase in the inflow tax may be applied to other kinds of transactions in a bid to stem the real’s rally against the dollar, the Sao Paulo-based newspaper reported.
The Finance Ministry didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: November 6, 2009 07:14 EST
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports - Bloomberg.com
An increase in the inflow tax may be applied to other kinds of transactions in a bid to stem the real’s rally against the dollar, the Sao Paulo-based newspaper reported.
The Finance Ministry didn’t immediately return calls by Bloomberg News seeking comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: November 6, 2009 07:14 EST
Brazil May Exempt IPOs From Foreign Inflow Tax, Estado Reports - Bloomberg.com
Thursday, November 5, 2009
Brazil to Propose Measures on Exchange Rates at G20, Folha Says
By Andre Soliani
Nov. 5 (Bloomberg) -- Brazil will propose to the Group of 20 countries measures to avoid overvaluation of the Brazilian, Australian, New Zealander and South African currencies against the U.S. dollar and the Chinese yuan, Folha de Sao Paulo reported, citing Finance Minister Guido Mantega. Mantega told the Sao Paulo-based newspaper that investors are shifting money to commodity exporting economies because rich nations are paying low interest rates.
The government’s 2 percent tax on foreign purchases of fixed income securities and equities is helping contain stock and currency gains, Folha reported Mantega as saying.
To contact the reporter on this story: Andre Soliani in Brasilia at asoliani@bloomberg.net
Last Updated: November 5, 2009 07:08 EST
Brazil to Propose Measures on Exchange Rates at G20, Folha Says - Bloomberg.com
Wednesday, November 4, 2009
Brazil Real Needs to Drop 19% for Sustained Growth, Barbosa Says
By Fabiola Moura
Nov. 4 (Bloomberg) -- Brazil’s currency needs to weaken as much as 19 percent for sustainable economic growth, said Nelson Barbosa, the Brazilian Finance Ministry’s top policy adviser.
The real needs to be at 2.1 to 2.12 per U.S. dollar for growth, Barbosa told reporters at an event in New York. The currency traded at 1.7237 per dollar at 11:10 a.m. New York time.
To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net
Last Updated: November 4, 2009 11:16 EST
Brazil Real Needs to Drop 19% for Sustained Growth, Barbosa Says
Nov. 4 (Bloomberg) -- Brazil’s currency needs to weaken as much as 19 percent for sustainable economic growth, said Nelson Barbosa, the Brazilian Finance Ministry’s top policy adviser.
The real needs to be at 2.1 to 2.12 per U.S. dollar for growth, Barbosa told reporters at an event in New York. The currency traded at 1.7237 per dollar at 11:10 a.m. New York time.
To contact the reporter on this story: Fabiola Moura in New York at fdemoura@bloomberg.net
Last Updated: November 4, 2009 11:16 EST
Brazil Real Needs to Drop 19% for Sustained Growth, Barbosa Says
Brazil Removal of Outflow Barriers Is ‘Inevitable,’ WestLB Says - Bloomberg.com
Brazil Removal of Outflow Barriers Is ‘Inevitable,’ WestLB Says
By Camila Fontana
Nov. 4 (Bloomberg) -- The removal of barriers to the outflow of dollars from Brazil is inevitable, said Ures Folchini, executive vice-president of local markets at Banco WestLB do Brasil.
Central bank President Henrique Meirelles said late yesterday that Brazil is conducting studies to remove “artificial impediments” to outflows of foreign currencies.
Meirelles, speaking at an event in Oxford, U.K., said the country needs to “modernize” its exchange rate system.
The Brazilian real is the best performer against the dollar this year among 26 emerging-market currencies tracked by Bloomberg, with a 34 percent gain.
The real rose 0.7 percent to 1.7330 per U.S. dollar at 7:57 a.m. New York time, from 1.7446 yesterday.
WestLB predicts the real will finish the year at 1.65 per dollar. Folchini spoke in a phone interview from Sao Paulo.
On the proposal by the central bank:
“This is an inevitable step that is seen as an advancement by the market. Our economy is becoming increasingly important.
“You know you can get out if you need to. You get more comfortable to invest, that helps the real to go up.”
On the real’s direction:
“The real is following the trend of other currencies against the dollar, with smaller or greater intensity. Even the measures that were taken by the government to curb gains won’t interrupt this trend.”
On capital flows into Brazilian securities:
“The window for companies to issue bonds is very large.”
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 4, 2009 08:04 EST"
By Camila Fontana
Nov. 4 (Bloomberg) -- The removal of barriers to the outflow of dollars from Brazil is inevitable, said Ures Folchini, executive vice-president of local markets at Banco WestLB do Brasil.
Central bank President Henrique Meirelles said late yesterday that Brazil is conducting studies to remove “artificial impediments” to outflows of foreign currencies.
Meirelles, speaking at an event in Oxford, U.K., said the country needs to “modernize” its exchange rate system.
The Brazilian real is the best performer against the dollar this year among 26 emerging-market currencies tracked by Bloomberg, with a 34 percent gain.
The real rose 0.7 percent to 1.7330 per U.S. dollar at 7:57 a.m. New York time, from 1.7446 yesterday.
WestLB predicts the real will finish the year at 1.65 per dollar. Folchini spoke in a phone interview from Sao Paulo.
On the proposal by the central bank:
“This is an inevitable step that is seen as an advancement by the market. Our economy is becoming increasingly important.
“You know you can get out if you need to. You get more comfortable to invest, that helps the real to go up.”
On the real’s direction:
“The real is following the trend of other currencies against the dollar, with smaller or greater intensity. Even the measures that were taken by the government to curb gains won’t interrupt this trend.”
On capital flows into Brazilian securities:
“The window for companies to issue bonds is very large.”
To contact the reporter on this story: Camila Fontana Correa in Sao Paulo at cfontana@bloomberg.net
Last Updated: November 4, 2009 08:04 EST"
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