Brazil and Chile Battle Rising Currencies

Wednesday, January 5th 2011 - 09:09 UTC

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Brazil on Tuesday threatened tougher capital controls and other measures to keep its currency from rising against the dollar, a day after Chile's central bank unveiled its own $12 billion plan to buy greenbacks. Read full article

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easybrazilinvesting
The Brazilian problem is to blame more China and itself than the US.
To start, the US is throwing money into the economy to generate the recovery the whole world wants to see, including Brazil. The alternative would be to let the economy with a very sluggish recovery if not a double-dip recession. Yes, it creates liquidity and depress the currency but that is not the main point.
Brazil's problem is the fact that the public sector can't contain its spending, which would allow for a lower interest rate and make the country less attractive for carry-traders while providing cheaper credit for productive investment.
Now, China, of course, keeps its currency artificially depreciated to benefit in the foreign trade and that is a problem for every country in the world!

Alex Felipelli
http://www.easybrazilinvesting.com/get-to-know.html
Jan 12th, 2011 - 03:25 am - Link - Report abuse 0
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