Brazil has declared a fresh “currency war” on the US and Europe
Brazil has declared a fresh “currency war” on the US and Europe, extending a tax on foreign borrowings and threatening further capital controls in an effort to protect the country’s struggling manufacturers.Guido Mantega, the finance minister who was the first to use the controversial term in 2010, said the government would not “sit by passively” as developed nations continue to pursue expansionary monetary policies at the expense of Brazil.“When the real appreciates, it reduces our competitiveness.
I thought they benefited in the hiking commodity prices, and it's time they start to bear the cost of that euphoria. world is even in the end.
They are the worlds 7th largest economy overtaking the UK and have a decent growth forecast.
They have overtook UK thanks to currency appreciation and they grow is slowest in BRIC block...if they win they battle they will lower they GDP below UK's but they will become more competitive in global trade and may help revive grow..either or they are to blame for they situation ( high interest rates to attract foreign capital ) and based on this country monetary tradition they " war " will just do a mess ( maybe they got tired REAL and want to change they currency again )
I see nothing wrong in that. Facing the recessionary period of slower growth expansionary policy makes sense. Why Brazil didn't pursue it earlier is a mystery to me. they act as if everybody is hurting them deliberately by devaluing their currency. that's silly.