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Non-Tech : The Brazil Board -- Ignore unavailable to you. Want to Upgrade?

To: Julius Wong who wrote (258)	5/3/2011 4:12:42 PM
From: elmatador	Read Replies (1) \| Respond to of 2510

Mantega: Action Possible Against Brazil Real Appreciation SAO PAULO (Dow Jones)--More government measures are possible as Brazil struggles to avoid the continued appreciation of its currency, the Brazilian real, against the U.S. dollar, Finance Minister Guido Mantega said Tuesday in congressional testimony. "More action is always possible and we do not rule out any measures," Mantega told members of congress at a televised hearing. "However, we will not give advance notice if we adopt any additional measures. The element of surprise is important." The Brazilian real has gained some 45% against the U.S. dollar over the past two years, hurting exporters and manufacturers. Beginning in September of 2010, the Brazilian government has adopted a number of measures to halt, or at least slow, the further appreciation of the currency. Measures have included higher taxes on certain investment inflows as well as higher reserve requirements on foreign-exchange futures positions. Tuesday afternoon, the real was trading at about BRL1.59 to the dollar, representing an appreciation so far this year of some 4% against the U.S. dollar. Mantega said, "Without the measures we adopted, the real today would be trading at BRL1.40 to the dollar." Mantega added, "The government has long been concerned about about the effects of the strong real on exports. We are losing foreign markets, but we don't want to fall into the trap of adopting protectionist measures." Mantega said the government was studying a possible "package of measures to aid exporters." However, he did not specify what measures might be included. Mantega also commented on concerns over the possible inflationary impact of a big increase in the minimum salary scheduled for 2012. Under the current formula, enshrined in a 2005 law, the minimum salary is due for an increase next year of 13% to 14%. The minimum salary is currently BRL545 per month, or the equivalent of about $343. "The rise of the minimum salary next year does not worry me," he said. "That's an outdated idea. In fact, the rise in purchasing power will stimulate both demand and production."