MercoPress. South Atlantic News Agency

Brazil to Announce Exports’ Stimuli Measures to Compensate for Strong Real

Economy minister Guido Mantega said that an Eximbank to support exporters could be one of the measures

The Brazilian Government is expected to announce Wednesday a number of exports' stimulation measures in order to try to compensate the area which claims losses caused by the strong Brazilian currency exchange rate and the drop of global commerce.

“We are going to announce measures that will have an immediate impact because they will lower exports costs and will allow competitiveness” Brazil's Economy Minister Guido Mantega said in advance.

One of the main announcements that is pending approval is the creation of an Eximbank, a finance institution that has been analyzed by Brazil over last two decades and which is destined to fund exporters. The institution will have the resources of the export credit lines that already exist at the Brazilian Development Bank (BNDES).

The announcement will be done during a meeting of the Growth Administration Group (GAC) and will be focused in speeding up the refund of two taxes that have to be returned to raw materials exporters. “We are going through tough moments of international commerce because those economies that have not been able to overcome the crisis import less. So we don't sell Brazilian products to those countries,” the minister said.

During the first quarter of 2009, Brazilian exports grew 19% compared to the same period in 2008.

Mantega defended the Brazilian exchange rate (it lost more than 30% since January 2009) by saying that the government managed to “stabilize it” with the external operations financial tax destined to stocks and fixed-term deposits. The Real soared from 2.10 to the US dollar when the crisis at the end of 2008 to 1.75 currently making Brazilian goods dearer in dollar value.

The Ministry of Development, Industry and Foreign Trade (MDIC) informed that during April imports soared 60.8% compared to the volume reported in the same month last year, while exports gained 23%. ”We cannot deal with the Brazilian imports due to the (weak) exchange rate. Our solution is to give exports competitiveness” said Brazil’s Secretary of International Commerce Welber Barral.