Brazil Stocks Suffer Worst Fall Since 2001. Crisis Will Make Us Stronger, Say Authorities

Brazil's Bovespa Brazil is telling Brazilians and the world that there's no reason for panic in the wake of the latest Wall Street meltdown, which saw the bankruptcy of 159-year old financial giant Lehman Brothers and the buying out of Merril Lynch by Bank of America for liquidation price.

The president of the Brazilian Central bank, Henrique Meirelles, said this Monday, September 15, that Brazil is monitoring the international financial crisis carefully. "Brazil is ready to tackle an adverse situation of the international markets," Meirelles stated during a press conference in São Paulo. "Brazil's Central bank is in permanent contact with foreign central banks monitoring everything very carefully."

The Bovespa, São Paulo's stock exchange, with a trading volume of 6.571 billion reais (US$ 3.634 billion) closed Monday's trading session with a 7.59% loss, the largest decline since September 11, 2001, when the Bovespa index, the Ibovespa fell 9.17%.

The stock exchange closed at 48,416 points after having opened at 52,386 points. The Bovespa index has fallen 13,05% this month and 24.21% during the year. The dollar, on the other hand, went up 1.85% closing the day at 1.8140 reais per dollar.

Price reductions of raw material important for the Brazilian industry and losses of the bank sector were the main factors that dragged the Bovespa index down.Oil multinational Petrobras (-9.69%) and mining firm Vale (-9.86%) were the companies whose stocks fell the most.

Brazil's Finance minister, Guido Mantega, warned investors to avoid taking hasty decisions due to the sharp decline of the Brazilian stock exchange.

"Investors and bank client, should do nothing. They should leave everything the way it is because everything will be back to normal," Mantega told reporters soon after the closing bell rang.

"This is not the time for rashness, even because the Brazilian economy is sound. There is much fluctuation in this moment of crisis, fluctuations that will go back to normal later."

According to Mantega, "Brazil is a safe harbor" amidst the international crisis, since its economy is strong. He reiterated forecasts that the country will grow 5.5% this year and 4.5% in 2009,

"Brazil will be one of the economies that will be strengthened by this crisis, while other countries will be weakened,"  stated the minister.

As for the dollar hike, Mantega said that Monday's increase was not substantial. "The dollar gain was small," he noted, "This shows that there is not an impetus for the dollar to go up."

Mantega also believes that Brazil's growth won't be stunted by the falling prices of commodities and  the flight of foreign investors from the Brazilian stock market. The minister, however, thinks that the Lehman Brothers bankruptcy means the American financial crisis is getting worse:

"This was an important financial institution. Other institutions will also suffer some fall or will have bigger losses. This means a longer, more prolonged, more profound crisis of the American economy."

And he added: "The trouble is there, not here, We've been enduring a financial crisis for more than a year now."

Tags:

You May Also Like

Egypt Seeks Closer Ties to Brazil and Mercosur

Egyptian interests were contemplated in the proposal of the declaration of the summit between ...

Nobel Prize Winner and Catholic Leaders in Brazil Condemn US Imperialism

The President of Venezuela, Hugo Chávez, was in the state of Paraná, in the ...

Brazil’s Petrobras Strikes Light Oil Deep in the Santos Basin

Petrobras, the Brazilian oil giant, announced yesterday, July 11, the discovery of light oil ...

World Bank Helps Improve Slums in Brazil

The World Bank plans to expand its investments in urban infrastructure all around the ...

Book Says Brazil’s Lula Told Kirchner to Fuck Off. Ambassador Calls It Fantasy

Brazilian ambassador in Chile described as mere "fantasy" alleged statements by President Lula da ...

Brazil Worried US Is After Its Oil and the Amazon

The imminent agreement between the United States and Colombia over the use of seven ...

Rapidinhas

Politics Baring for votes Naked Núbia for city council The epithet Peladona (stark naked ...

How Brazil’s Cardoso Left Marxism, But Not Marx Way of Seeing History

To the many critics in both the ivory tower and the political realm who ...

Brazil to Issue Treasury Bonds in the US and Europe

Brazil's Finance Ministry informed this Monday, January 6, that the Brazilian National Treasury is ...

Here’s Why for Some Intervention Is the Only Way Out in Brasília

It was an unprecedented decision in Brazil. Late in the afternoon of February 11, ...