Bear Stearns' Ross on Brazil Devaluing: Global Economy Comment
Washington, Jan. 13 (Bloomberg) -- The following is a
comment from Carl Ross, managing director of Latin American
research at Bear Stearns & Co. in New York, on Brazil's decision
to let its currency, the real, weaken at a faster pace:
''I think in the short-term it sends a signal of
capitulation and greater uncertainty,'' Ross said. ''The medium
term effect of this policy is going to depend a great deal on
what follow-up there is on fiscal measures. The onus is on
(Brazil's) Congress to get things done.
''The exchange rate adjustment is relatively minor, I would
view this as something the authorities are doing to take a little
of the pressure off,'' he said.
''I would assume that the Brazilians consulted with the IMF
on this,'' Ross said. ''Certainly the IMF program said that the
exchange rate regime would not change -- this would appear to be
a deviation of the program.''
Still, ''I think it's early to say there's a loss of
credibility in the IMF or the U.S. Treasury,'' Ross said.
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