Brazil offshore bank deposits surge-report. USD deflection...
Brazil offshore bank deposits surge-report
Wed Jul 29, 2009 10:53am EDT Email | Print | Share| Reprints | Single Page[-] Text [+]
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More Business & Investing News... SAO PAULO, July 29 (Reuters) - The offshore subsidiaries of Brazilian banks are seeing a surge in U.S. dollar deposits by the nation's companies, which are keeping their export revenue out of the country, the newspaper Valor Economico reported on Wednesday.
Offshore subsidiaries of Banco do Brasil (BBAS3.SA), the largest Brazilian state commercial lender, saw deposits by companies rise tenfold to $4 billion in the 12 months through June, mainly because managers were allowed by a new law to keep all export revenue outside the country indefinitely, Valor said.
The Brazilian government implemented the measure in March 2008 to fend off a flood of U.S. dollars into the country that pushed the real BRBY, Brazil's currency, near a nine-year-high.
It has become more convenient for companies to keep their money outside Brazil as the real has strengthened against the dollar since April, when concern over the extent and size of the credit crisis eased. Exporters have complained that their revenue from exports has declined considerably, when translated into the local currency, because of the global drop of the dollar.
Corporate accounts at the New York and Nassau branches of Itau Unibanco (ITUB4.SA), Brazil's largest bank by assets, have risen tenfold since January 2008, with the value of deposits up 150 percent, Itau director Mario Brugnetti told Valor Economico.
Allan Tolledo Simoes, Banco do Brasil's vice president for international business, was quoted by the newspaper as saying the credit crisis sparked uncertainty over the future of some European and U.S. lenders, aiding the migration to offshore deposits.
Brazilian banks reported total offshore deposits of $13.2 billion in the first half of 2009, according to central bank data released on Tuesday. (Reporting by Guillermo Parra-Bernal; editing by John Wallace) |
