Brazil's minister of Finance, Guido Mantega, attributes the great interest in foreign investment in Brazil to the fact that the country is leaving the crisis highly attractive to the foreign market. He denied, however, that any excess, or speculative movement has been identified.
Mantega said that the optimism with regard to Brazil may result in a great flow of capitals, but remarked that such movement has not yet been noticed.
He explained that the pressure on exchange has been taking place due to the initial public offerings (IPOs) of some companies, like that of Santander bank, earlier this month, attracting US$ 8 billion.
"It is the largest operation of this kind. The problem is that it should imply in the entrance of foreign capital. So that should generate some pressure, in the form of excessive dollar liquidity."
The Minister guaranteed that if there is abnormal exchange movement, the government will be aware of it and will take the necessary measures to avoid problems for the Brazilian economy.
Mantega stated that he does not like excessive appreciation of the Brazilian real against the dollar, but agreed that it is part of the rules, as, according to him, Brazil is "currently a strong country, more solid and more attractive to other capital."
According to the minister, Brazil is paying the price of being more successful in fighting the global crisis and recovering from the crisis faster than other countries, but emphasized that the government does not plan to alter the exchange regime, as the currency floats.
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