MercoPress. South Atlantic News Agency

Brazil as concerned with the US dollar as with China’s Yuan

Minister Mantega denied any joint initiative with Washington to press China

Brazil is as concerned about the decline of the U.S. dollar as it is about the Chinese currency and has no plans for a joint initiative with Washington to press China to let its currency appreciate faster, said Finance Minister Guido Mantega

Some members of the Group of 20 leading and emerging economies say China is causing problems with trade and currencies by manipulating the value of its money. But Mantega says the Federal Reserve efforts to stimulate the US economy are causing just as many problems for Brazil.

The debate comes as finance ministers and central bank governors head for talks on tough economic issues later this week and the long-simmering dispute over the way China sets the value of its currency will be a key issue on the agenda in Paris on the 18th and 19th of February.

The US and some other nations complain that Beijing obtains an unfair price advantage for its exports by pushing down the value of its currency. Some economists say China's policy has hurt the economies of both Brazil and the US.

But in a telephone conference for journalists Minister said bluntly there is no plan for joint action by Washington and Brazil to press China for change. “Brazil is as concerned about the decline of the U.S. dollar as it is about the Chinese currency” he said.

Mantega says Washington also hurts Brazil when efforts to stimulate the US economy with low interest rates and a massive program to purchase financial assets cut the value of the dollar.

Mantega who was the first to coin “currencies war” expression says low interest rates and weak currencies in developed nations mean investors can get better returns in dynamic emerging nations like Brazil.

A flood of foreign investment has sharply raised the value of Brazil's currency, which means Brazilian-made products cost more to foreigners and the higher price hurts the nation's vital export sector.