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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (70284)	1/12/2011 8:57:28 AM
From: elmatador	Respond to of 218047

Roubini Doubts Fraga-Backed Budget Plan to Weaken Currency: Brazil Credit By Ye Xie and Alexander Ragir - Jan 11, 2011 2:33 PM GMT-0200 Nouriel Roubini, the New York University economist who predicted the global financial crisis, says Brazilian Finance Minister Guido Mantega’s proposal to stem currency gains by cutting spending is flawed. Brazil, which has struggled alongside developing nations from South Korea to Chile to halt currency gains, plans a “strong fiscal move” to curb demand and cool inflation, paving the way for the central bank to trim interest rates, Mantega said Jan. 4. Lower rates will curb foreigners’ demand for fixed- income assets and help brake a two-year, 37 percent rally in the real, Mantega said, echoing an argument made by economists including former Brazilian central bank President Arminio Fraga. Roubini says the move may backfire, luring more foreign capital instead of less, because spending cuts will reduce the budget deficit and bolster the country’s creditworthiness. Lower government expenditures will also stem the country’s record current account deficit, helping buoy the real, he said. bloomberg.com