“It’s not good to arrive in Seoul with the title of the most overvalued currency among all the countries participating in the G-20 meeting,” Rousseff was quoted. She traveled to Seoul with the current Finance minister Guido Mantega, the only member of the current cabinet so far confirmed, according to the Brazilian media.
Mantega although an orthodox is also known to be more in line with “a national development” focus, preferred by Rousseff, which differs from the ultra orthodox Central Bank president Henrique Meirelles who is praised for having kept inflation under control with a most conservative monetary policy based on extremely high interest rates.
In Seoul and in spite of a very pleasant exchange with US President Barack Obama, the Brazilian president-elect was extremely critical of what she described as the “disguised devaluation” of the US dollar following on the latest Federal Reserve decision to further pump 600 billion US dollars to the economy.
“A weak dollar means the burden rests on the backs of other economies. But we don’t influence the Fed, so there’s not much to control misbalances and much less to be done by other sovereign governments.” said Rousseff who nevertheless admitted that China did what was needed, “it kept the Yuan is strict relation with the US dollar.”
When asked how her administration would react to preserve Brazil from the impact of the devalued US dollar she replied “there are certain measures that are not even confessed to yourself”.
This somehow presents a different focus from the current scenario in Brazil and could mean changes as of January first 2011 when Rousseff takes office. The less orthodox and more “national development” prone Mantega will be in the spotlight while with president Lula the stage was fully occupied by the Central bank’s ultra-orthodox president Meirelles.
With the Brazilian press president Lula tried to diffuse the apparent differences arguing that the exchange rate is flexible, which means it can “go up or go down,” and what really matters to his administration is not a devaluation of the real but rather that the United States repositions the US dollar higher.