Brazil Starts Changing Direction with a Greater Dollar Influx

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Dollar influx Brazil started the month registering greater inflow than outflow of dollars. According to figures disclosed this May 13 by the Brazilian Central Bank, the currency flow was US$ 1.162 billion positive in the month, up to Friday, May 8.

This value is the result of a balance of US$ 108 million in the trade flow and US$ 1.054 billion in the financial flow. The trade flow measures not just the trade balance (exports minus imports), but the financing of foreign trade through Advances on Exchange Contracts (ACC) and anticipated payments.

The financial flow measures the entrance and exit of funds through the purchase and sale of shares, papers, foreign investment and transfer of profits and dividends abroad.

This balance, however, is sensitive to stock market oscillation, rapidly reflecting changes in perception of foreign investors and improvement of the financial market, like the bull markets over the last few days.

The exchange flow is the greatest registered since the first week of May last year. According to the Central Bank, the trade balance result had been US$ 835 million in the first five working days of May 2008.

Despite the improvement, the trade flow continues negative in the accumulated result due to the outflow of funds resultant from the international financial crisis.

From January to the first week of May, the negative balance was US$ 382 million. In the same period in 2008, the result had been US$ 16.4 billion.

ABr

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