LatinNews Daily Report - 15 May 2012

ECONOMY | Real falls to R$2/US$.  On 14 May, the Real fell to R$2.0/US$ for the first time since July 2009, on the back of global market jitters about the European economic crisis. Brazil’s Finance Minister Guido Mantega told reporters that the weaker Real “is beneficial for the Brazilian economy”, noting that it would make domestic manufacturers and exporters more competitive. Mantega added that the currency “will continue to move in accordance with the market” and denied that the government has any set parameters for the exchange rate. Although a weaker Real will pressure inflation, the central bank hopes that softer global commodity prices will counteract that to some degree. Local economists on 11 May reduced their end-2012 consensus forecasts for the benchmark Selic interest rate to 8.0%, but increased their end year inflation forecast to 5.22%, up from 5.15% previously. The central bank president Alexandre Tombini insists that inflation is slowing.

End of preview - This article contains approximately 253 words.

Subscribers: Log in now to read the full article

Not a Subscriber?

Choose from one of the following options

• Subscribe
• Sign up for a one-time, 14-day trial