A possible debt default by a Dubai state-owned conglomerate is an alert signal to avoid market euphoria, Brazil central bank chief Henrique Meirelles said on Friday.
Speaking at a Sao Paulo event, Meirelles also said that no Brazilian banks are exposed to the potential Dubai default.
The recovery is slow, painful and subject to uncertainties, and this is what is happening, Meirelles said, referring to the situation in Dubai.
It is one of the reasons why we have alerted against excessive euphoria.
Global markets have come under pressure in recent days after Dubai on Wednesday said it would ask creditors of two flagship firms, including conglomerate Dubai World, for a standstill on debt payments as part of a restructuring.
That decision sparked concerns about the financial health of the Gulf region and worries over the potential exposure by banks around the world.
However the Brazilian real closed stronger against the dollar on Friday as concerns about the ramifications of the Dubai debt situation eased. The real ended at 1.7434 to the US dollar compared with 1.750 on Thursday.
Investors ran for cover Thursday on news that Dubai World asked for a six-month stay on debt repayments. Dubai World's liabilities total about 60 billion USD.
Markets calmed after Finance Minister Guido Mantega and Brazil's banks said there was no local exposure to the fund, while European banks said they weren't as exposed to state-run Dubai World's debt as initially believed.