Brazil's development bank BNDES chief Luciano Coutinho said on Thursday that a sustainable exchange rate for the country would be between 2.2 and 2.35 Reais to the US dollar, which is currently trading at around 2.44.
Within that range, the Real would benefit exporters without causing excessive inflation pressure, Coutinho, a close aide of President Dilma Rousseff, told reporters at an event in Rio de Janeiro.
The Real has depreciated rapidly in recent weeks and trades at around 2.44 per dollar after a recent sell-off drove it to its lowest level in nearly five years, adding to inflation concerns in Latin America's largest economy.
The Real lost 7% in the last month and 18% in the twelve months to July.
I believe at some point the currency will stabilize. There is some overshooting in the exchange rate, but we need to keep calm because we have good fundamentals, Coutinho said, citing the country's 370 billion dollars in foreign reserves.
Coutinho also revealed on Thursday that BNDES estimates it will finance about 30 billion Reais (12.34bn dollars) in infrastructure projects in 2013, which represents a 22.5% more than it did in the previous year.
BNDES development loans to boost agriculture and industry are usually awarded in soft terms with rates usually below the inflation.
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Disclaimer & comment rules2.44, - Ooohh! 'Suit you sir!....
Aug 23rd, 2013 - 02:41 am 0Commenting for this story is now closed.
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