Brasília – Brazil is willing to buy more dollars in order to keep the real depreciated, said Finance minister Guido Mantega this Friday (21st). According to him, the government means to prevent the Brazilian currency from appreciating as a result of the United States’ monetary stimulus policy, stressing once again the risk of a “currency war.” Mantega made the statements in London during a press conference held by magazine The Economist.
The value of the dollar relative to Brazil’s real has been declining since last week, when the Federal Reserve Bank (Fed, the USA central bank) announced that it will purchase US$ 40 billion worth of mortgage bonds a month until the country’s employment situation improves.
According to Mantega, “it is only natural that other countries should defend themselves from attitudes of this kind, which don’t necessarily bring direct benefits or lead local markets to recovery, but which will foster a currency war by driving other countries will be led to engage in one.”
On Monday, the Brazilian Central Bank intervened in the foreign exchange market by purchasing US$ 2.1 billion (R$ 4.2 billion) on the futures market to try and keep the real from appreciating in relation to the US Currency. Up until September 14th, the flow of foreign exchange, i.e. dollar inflow to the country minus the outflow, showed a US$ 460 million surplus.
*With information from Agência Lusa. Translated by Gabriel Pomerancblum
