MercoPress. South Atlantic News Agency

Brazil insists an agreement must be reached to end the “currency war”

Minister Guido Mantega introduced the term “currency war”

Brazilian Finance Minister Guido Mantega insisted while in Washington on the need of the international community to “coordinate” and “reach some kind of agreement” during the next G20 summit in order to put an end to the “currency war” that puts world recovery in danger.

During the gathering in Seoul, ”we must try to reach some sort of agreement to organize this (currency) dispute which, in the end, is purely commercial,“ Mantega said in a conference held at the Council of the Americas institute in Washington.

”It's better to coordinate (...) if not, each country is going to seek its own interests and we're going to damage free trade and free currency flow,“ he insisted.

The ”currency war,” term introduced by Mantega, was the main topic of discussion during the annual International Monetary Fun (IMF) and World Bank meeting, which concluded last Saturday in Washington, without great progress on the matter.

During the meetings, Mantega made a claim to developed countries, such as the United States and Germany, to resume fiscal stimulus policies instead of betting on “aggressive” monetary policies that are not resulting in an improvement of domestic demand and that are also provoking a very strong appreciation of currencies in emerging nations, such as Brazil.

Despite not having received a favourable answer to his demands during the IMF meetings, Mantega highlighted that his intention is to continue insisting on a coordinated action since, on the contrary, not only will the recovery of advanced economies be “that much slower,” but also, a real “risk” of falling for “trade protectionism” and “restrictions” for the free flow of capitals exists.