According to Brazilian Minister of Finance, Guido Mantega, Brazil has been able to weather the recent international financial market turbulence because of its strong currency (now backed by over US$ 62 billion in international reserves) and a solid trade surplus.
Speaking at a congress on information technology for financial institutions, Mantega declared that Brazil is in a unique position today, very different from the recent past.
"We have more dollars than we need. And that is a cushion. Countries that need dollars are having difficulties because of the recent market turbulence. An example is Turkey where there is a current account deficit and they need a constant dollar inflow. We have sufficient dollars because of our trade surplus and direct investments," said the minister.
According to Mantega, the size of Brazil’s cushion is an annual surplus that reached US$ 15.6 billion. "That protects us so that turbulences have little or no effect here," explained the minister.
ABr