Jump to content
House Price Crash Forum
Sign in to follow this  
interestrateripoff

Brazil Central Bank Commits $60Bn To Prop Up Currency

Recommended Posts

http://www.bbc.co.uk/news/business-23808177

Brazil's central bank has announced a $60bn plan to prop up the value of the national currency.

It comes as the Brazilian real nears a five-year low against the US dollar.

The real and other emerging market currencies have fallen steadily over the last three months on speculation of higher US interest rates.

The central bank said it would spend $500m a day on Mondays to Thursdays and $1bn on Fridays buying reais in the currency markets.

The Monday-to-Thursday interventions will target currency swap markets - financial derivatives used by companies and investors to hedge their currency exposure - while on Fridays, the central bank will buy the national currency directly in return for US dollars.

The interventions will run up until December.

"This shows the firm determination of monetary authorities to keep the exchange rate from slipping further," said Andre Perfeito, chief economist at Gradual Investments in Sao Paulo.

No what it show is the monetary authorities determination to give as much money as possible away free. Good to see that central bankers are prepared to spend as much money as they can on market manipulation. Using the money to improve health care and education in Brazil is clearly a crazy idea.

http://www.economist.com/blogs/americasview/2013/02/social-spending-brazil

LAST week Brazil’s president, Dilma Rousseff, made an audacious claim: extreme poverty in Brazil will soon become extinct. Brasil Sem Miséria (Brazil without destitution), a federal programme, has already added 2.8m extremely poor people to a new, single list of potential welfare recipients since its launch in June 2011. A total of 22m people have been given additional cash benefits to bring them above the absolute poverty line, currently set at 70 reais ($35) per household member, per month. By adding a further 770m reais to annual federal welfare spending, currently around 30 billion reais, the government will be able to do the same for the remaining 2.5m very poor people it knows about, the president said. She asked mayors to help seek out the Brazilians still sunk in deep poverty who appear on no government list, and receive no federal aid—probably another 2.5m people.

Great to see the Brazilian govt doing all it can to alleviate the poverty of bankers.

Share this post


Link to post
Share on other sites

The interventions will run up until December.

"This shows the firm determination of monetary authorities to keep the exchange rate from slipping further," said Andre Perfeito, chief economist at Gradual Investments in Sao Paulo.

They must be slipping. They normally call themselves bold and decisive.

Share this post


Link to post
Share on other sites

Seems like just 2 minutes ago they were accusing the US of devaluing their currency and exporting inflation...I believe they used the phrase "currency wars" against the US.

This whole thing seems like it is starting to go pretty pear shaped to me.

No doubt these currency interventions are designed in some way to prevent the riots that happened previously. Then you have similar issues with the Indian currency. It feels like slowly but surely the wheels are starting to come off and the consequences of QE are really starting to come home to roost.

Share this post


Link to post
Share on other sites

This whole thing seems like it is starting to go pretty pear shaped to me.

No doubt these currency interventions are designed in some way to prevent the riots that happened previously. Then you have similar issues with the Indian currency. It feels like slowly but surely the wheels are starting to come off and the consequences of QE are really starting to come home to roost.

Moneyweek are urging you to 'buy Brazil' today, according to my mother.So,there you have it.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   203 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.