Lula Wants the G20 to Put an End to the Currency War

Dollar weak face the real The president of Brazil, Luiz Inácio Lula da Silva, said that the G-20 group must address the issue of the “currencies war” in direct reference to the forced depreciation by some rich countries of their currencies which negatively affects the competitiveness of its trade partners, particularly in the developing world. 

“All the world is aware that there’s a currency war on and that we need G20 to discuss the issue and find a solution,” said Lula speaking to journalists in Brazilian capital Brasília. The Brazilian leader is scheduled to travel to Seoul, South Korea November 11/12 for the G20 summit.

“We are going to do whatever is necessary to ensure that our Real does not keep appreciating against the so called ‘strong’ currencies thus impacting on our exports. I’ve given clear instructions to Finance minister Guido Mantega and Central bank president Henrique Meirelles to be alert the 24 hours and adopt all the necessary measures needed” to prevent the depreciation of the US dollar.

Last Monday Mantega announced that the tax on the inflow of short term foreign capital to Brazilian fixed assets will increase from 4% to 6%, to stop the ‘flood’ of US dollars appreciating the Brazilian Real.

Following the announcement the real lost most of the appreciation gained in recent weeks, but the relief was short lived and there are fears the Brazilian government could apply further measures.

“We have a reasonable trade surplus, which means we will end 2010 with a reasonable surplus, but we will take the necessary measures if this is endangered,” warned the Brazilian leader.

Mantega recently accused the US, China and Japan of artificially debilitating their currencies to increase international competitiveness while Brazil suffers the consequences of such measures, since with high interest rates to contain domestic inflation, this attracts foreign capital inflows and boosts the appreciation of the real.

“There are no miracles in economics. Minister Mantega’s measures were the correct ones, but we will adopt as many measures as necessary to prevent the real from over valuing”, he promised.

Finally, the Brazilian leader said that it’s important to remember that the problem is not Brazil: “All currencies are appreciating against the US dollar because the US needs to find a way to recover its economy.”

Mercopress

Tags:

Ads

You May Also Like

Brazil Gets Its First Hydrogen Fuel Bus

Brazil will get tomorrow, November 14, its first hydrogen cell powered bus. The vehicle ...

Arabs and Mercosur Take Step to Free Trade Zone

“Between 2003 and 2004, Brazilian exports for Arab countries increased 47%. This agreement further ...

Brazil’s Açaí­ Makes Further Inroads Among Health-Minded Americans

US-based Caffe Classico Foods  announced that it is going to start selling its Belizza ...

Brazil One of the First to Recover from Global Crisis, Says Minister

According to Brazilian Finance minister, Guido Mantega. Brazil is not facing fiscal troubles and ...

Brazil Is Coming to (New York) Town

This December, when the temperature outside is a balmy ten degrees, New Yorkers will ...

Antônia Joyce Venâncio and her dolls

All But White: Brazil’s Treasure-Trove of Black, Oriental, Handicapped Dolls

Businesswoman Antônia Joyce Venâncio has been having success since she bet on a market ...

Brazil’s Sugar Cane Harvest Grows 5.7% to 440 Million Tons

Brazil should harvest 440 million tons in the next sugar cane crop. The volume ...

Brazil’s Central Bank Expected to Raise Interests

Brazil’s financial market continues to expect an increase in the benchmark interest rate (Selic) ...

After 54 Deaths Brazilian Army Goes to the Streets to Fight Dengue

The Armed Forces of Brazil have joined the fight against dengue fever in Rio ...

Too Early to Write Off the Left in Latin America

Recent political developments across the region have prompted celebratory proclamations in the mainstream Western ...