Arab Today, arab today brazil to spend 55bn to defend sagging currency
Last Updated : GMT 22:28:13
Arab Today, arab today
Arab Today, arab today

Brazil to spend $55bn to defend sagging currency

Arab Today, arab today

Arab Today, arab today Brazil to spend $55bn to defend sagging currency

Sao Paulo - AFP

Brazil\'s central bank is to earmark $55 billion until year\'s end to prop up the sagging real at a time when Latin America\'s biggest economy is showing weak growth. In a statement issued overnight, the bank announced the massive currency intervention involving daily sales of currency swaps and derivative contracts to boost the real and regain the confidence of markets. Following the announcement, the Brazilian currency, which has been at its lowest level against the greenback in four years, opened at 2.40 to the dollar Friday, up 1.23 percent from Thursday\'s close. \"The intervention was a positive signal for all emerging markets,\" said Luis Costa, a strategist at Citigroup. \"It signaled to investors that central banks of emerging economies are reacting more aggressively and are ready to step up their intervention to stabilize markets.\" Brazil, along with Russia, India and Turkey, is one of the main victims of a retreat by investors from major emerging economies in recent days. Keen to capitalize on a stronger dollar amid anticipation of tighter US monetary policy, investors are withdrawing from emerging markets seen as showing structural weakness. The central bank said it would offer $500 million a day in currency swap contracts from Monday through Thursday and $1 billion on Fridays, without ruling out further interventions if necessary. Since May, it has already injected $45 billion to prop up the real, which means it will have put in a total of $100 billion by the end of the year. The $100 billion represents nearly a quarter of the country\'s foreign reserves, according to the daily O Estado de Sao Paulo. \"I think the central bank\'s posture is necessary given the markets\' current volatility,\" said Wellington Ramos, an analyst with Austin Rating in Sao Paulo. \"There is a need to regain the confidence of investors,\" he added. \"It was a good decision to the extent it clarifies and makes official for the markets a daily intervention to meet the demand (for dollars),\" said Silvio Campos Neto, an analyst with Consultora Tendencias. \"That is what we saw coming, but today it is in a transparent, predictable and daily manner, he added. \"The main goal is to signal to the market that the bank will continue to provide what is necessary.\" The real\'s weakness comes as Brazil is showing stagnating growth. Finance Minister Guido Mantega has said GDP growth would reach only 2.5 percent this year and four percent in 2014. Last December, Mantega forecast four percent growth this year and in July brought it down to three percent. Meanwhile, the central bank, concerned about rising inflation, hiked its base rate to 8.5 percent in July, up from its historic low of 7.25 percent early this year. Brazil\'s 12-month inflation reached 6.27 percent until July, close to the 6.5 percent upper limit of the government target. The struggling domestic industrial sector opposes high interest rates, which it says will discourage investment. Brazil has experienced two years of low economic growth and high inflation, which have dented President Dilma Rousseff\'s popularity. Rousseff has also been hurt by last June\'s massive street protests demanding better public services and an end to endemic corruption. Brazil posted 0.9 percent GDP growth last year, after growing 2.7 percent in 2011 and 7.5 percent in 2010.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today brazil to spend 55bn to defend sagging currency Arab Today, arab today brazil to spend 55bn to defend sagging currency

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today brazil to spend 55bn to defend sagging currency Arab Today, arab today brazil to spend 55bn to defend sagging currency

 



Arab Today, arab today
Arab Today, arab today Designer Aql Faqih aspires to innovation

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation
Arab Today, arab today What's the reason and what you can do

GMT 05:44 2017 Sunday ,22 October

What's the reason and what you can do
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Syrian children die of hunger

GMT 19:25 2017 Sunday ,22 October

Syrian children die of hunger
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today World's deepest lake in peril

GMT 15:54 2017 Friday ,20 October

World's deepest lake in peril
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Delhi braces for pollution 'airpocalypse'

GMT 16:07 2017 Friday ,20 October

Delhi braces for pollution 'airpocalypse'
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today EU raids automaker BMW

GMT 11:06 2017 Saturday ,21 October

EU raids automaker BMW
Arab Today, arab today Sweden to get biggest car factory

GMT 14:10 2017 Friday ,20 October

Sweden to get biggest car factory
Arab Today, arab today Actress Mona Zaki praises husband’s role

GMT 08:15 2017 Thursday ,19 October

Actress Mona Zaki praises husband’s role
Arab Today, arab today Massacre fears spark race

GMT 19:09 2017 Thursday ,19 October

Massacre fears spark race

GMT 08:57 2017 Wednesday ,18 October

Actress Shery Adel happy for Egypt’s qualification

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 10:18 2017 Saturday ,21 October

How to do open-heart surgery

GMT 13:44 2017 Friday ,20 October

Barcelona through George Orwell’s eyes

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 20:46 2017 Thursday ,19 October

Qualcomm files lawsuits in China to ban iPhones

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday