Brazil Credit: $14 Billion Bet on the Real Flop Mantega
Published on September 25, 2010
The failure of Brazilian Finance Minister in terms for stemming a currency rally through Patroleo Brasileiro’s share of $70 billion is the leading international investor for making a real wagor of $14 billion.
A record bet of 284,967 was made by the foreigners versus the dollar on September 22. Montega is further seeing to conduct another rally with extended 35 percent since 2008. Most vowed that Brazil would not loose this game and the government can join hands with the central bank for buying the dollars after the nation’s current account deficit which peaked to $45.8 in last one year.
The central bank also seems to be stepping up in terms of purchasing the dollars with investors pouring money into the nation for participating in the record sales of shares by Patroleo Brasileiro. According to Altamir Lopes, the bank head of the economic department, the Banco Central of Brazil have bought $5.9 for 12 days in September which is the most in the past 11 months.
The real also seems to be rallying the record low borrowing costs in US and the European investors seek bigger returns among the developing nations. Barclays further predicts that the real would advance more to 1.7 per dollars over next six months.
Further, the holdings of the local government debts by the foreign investors peaked a record of 150.6 billion reais or a total of 10.1 percent from July’s 141 billion reais. Mantega, who served as the Finance minister since 2006, won the approval of using the sovereign wealth fund that contained 17.9 billion reais for purchasing the dollars. In Rio-de-Janeiro, he said on 15th September that the treasury could tap unlimited resources from the funds intended for buying the US currency.
The economists have also raised their forecast for real for 8 straight weeks. They expect it to soon trade at 1.75 per dollar by this year’s end. However, the forecast by median was around 1.8 billion dollar.
In a telephone interview, an emerging economic strategist, Eduardo Suarez, remarked that it seems to be very difficult for bringing a halt to the current currency appreciation. He also added that they have been also trying long for stemming the currency appreciation that rises consistently.
Published on September 25, 2010
The failure of Brazilian Finance Minister in terms for stemming a currency rally through Patroleo Brasileiro’s share of $70 billion is the leading international investor for making a real wagor of $14 billion.
A record bet of 284,967 was made by the foreigners versus the dollar on September 22. Montega is further seeing to conduct another rally with extended 35 percent since 2008. Most vowed that Brazil would not loose this game and the government can join hands with the central bank for buying the dollars after the nation’s current account deficit which peaked to $45.8 in last one year.
The central bank also seems to be stepping up in terms of purchasing the dollars with investors pouring money into the nation for participating in the record sales of shares by Patroleo Brasileiro. According to Altamir Lopes, the bank head of the economic department, the Banco Central of Brazil have bought $5.9 for 12 days in September which is the most in the past 11 months.
The real also seems to be rallying the record low borrowing costs in US and the European investors seek bigger returns among the developing nations. Barclays further predicts that the real would advance more to 1.7 per dollars over next six months.
Further, the holdings of the local government debts by the foreign investors peaked a record of 150.6 billion reais or a total of 10.1 percent from July’s 141 billion reais. Mantega, who served as the Finance minister since 2006, won the approval of using the sovereign wealth fund that contained 17.9 billion reais for purchasing the dollars. In Rio-de-Janeiro, he said on 15th September that the treasury could tap unlimited resources from the funds intended for buying the US currency.
The economists have also raised their forecast for real for 8 straight weeks. They expect it to soon trade at 1.75 per dollar by this year’s end. However, the forecast by median was around 1.8 billion dollar.
In a telephone interview, an emerging economic strategist, Eduardo Suarez, remarked that it seems to be very difficult for bringing a halt to the current currency appreciation. He also added that they have been also trying long for stemming the currency appreciation that rises consistently.