Crisis Hits Brazil: Credit Thins Out, Interests and Inflation Up

São Paulo, Brazil, Metro subway Brazil's annual inflation rate rose to a three-year high in October as the currency's significant plunge against the US dollar pushed up costs, according to the latest release from the government's statistics and geography institute, the IBGE.

Consumer prices as measured by the benchmark IPCA index rose 6.41% in the 12 months through October from 6.25% in September. The annual rate was the highest since July 2005.

As the global financial crisis has investors abandoning emerging markets, Brazil's currency real has lost a quarter of its value against the US dollar in two months, pushing up prices of goods and materials purchased overseas.

The October CPI was up 0.45% with food prices leading with 0.69%, boosted by a 7.74% jump for the price of black beans, a basic staple, and 3.61% for meat.

Since January inflation has remained above the 4.5% annual midpoint target of Brazil's central bank. The uncertain economic outlook convinced the Central Bank last October 29 to leave the benchmark rate unchanged at 13.75%, according to minutes of their meeting published this week.

The real lost 12% in October following a 14% loss in September, which was the Brazilian currency's worst month since a 20% plunge in September 2002.

Earlier this week it was announced that Brazil vehicle registrations during October fell for the first time in 2 years as credit dried up and interest rates rose. Vehicle registrations slipped to 239.200 units in October from 244.500 units a year earlier, the country's automakers association, known as Anfavea said in São Paulo. However production was little changed at 296.300, while exports declined 16% to 66.000.

Finance Minister Guido Mantega said a government-controlled bank will provide the equivalent of US$ 1.9 billion in loans to carmakers' financial arms to help sustain sales this month and in December.

Mercopress

Tags:

You May Also Like

After Meeting Fidel, Brazil’s Lula Says Cuban Is Fit Enough to Lead Again

Brazilian President, Luiz Inácio Lula da Silva, before leaving Cuba, where he went for ...

Brazil’s Lula Vows to Cut Own Flesh If Needed to Root Out Corruption

Brazilian President Luiz Inácio Lula da Silva sacked the leading officials from the government ...

Rio-based Pandeiro Jazz Pioneer Scott Feiner Goes the Crowdfunding Way

Rio de Janeiro-based Scott Feiner, like many independent artists of late, is reaching out ...

Brazil Discusses Judicial Reform in London

The Brazilian Minister of Justice, Márcio Thomaz Bastos, discussed Brazilian judicial reform with Lord ...

Petrobras Vows OIl Self Sufficiency for Brazil and First Surplus Ever in 2006

Brazilian state-owned oil company Petrobras’s director of Supply and Refining, Paulo Roberto Costa, had ...

Brazilians Want Foreign Trade Policy That Will Make Them Competitive

The main suggestion presented by Brazilian businessmen who operate in foreign trade in Brazil ...

Brazil Hath No Fury Like a Mayor Scorned

It’s the mayors’ turn. Since yesterday, at the federal capital, municipal officeholders have not ...

Brazil’s Development Bank to Fund US$ 34 Billion in Projects This Year

Brazil's BNDES (National Bank for Economic and Social Development) should end 2007 having loaned ...

After Three Decades of Delays and Protests Amazon Hydro Project Ready to Start

In Brazil, building will begin now on what should be the world’s third-largest hydroelectric ...

Petrobras? That’s PTbras for You

Lula’s party, the PT, cannot re-nationalize those areas and companies privatized during the Fernando ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`