Brazilian foreign investments amounted to US$ 15.022 billion in October, compared with only US$ 3 million for the same month in 2005, according to a statement issued by the Brazilian Central Bank (BC).
The high investment rate is due to the purchase of Canadian mining company Inco by Vale do Rio Doce, in October, the BC informed.
Nevertheless, according to the head of the bank’s economic department, Altamir Lopes, this capital outflow was neutralized by loans from foreign banks by the Brazilian company for the amount of US$ 13.628 billion, used in the Inco purchase operation.
"This is an atypical case of a very high Brazilian foreign investment, recorded as capital outflow, but which has as its counterpart a loan in the same balance of payments account. Therefore, the outcome is neutral, from a balance of payments perspective", Lopes explained.
From January until October 2006, Brazilian foreign investments were US$ 22.827 billion, a much higher value than recorded for the same period in 2005 (US$ 2.396 billion).
ABr