Brazil Stock Market in Free Fall While Real Sinks to Lowest Level Since January

    Brazilian currency, the real

    Brazilian currency, the real The Brazilian stock exchange index, Bovespa, fell 4.5% on Tuesday, September 9, hitting the lowest level in a year as prices for top commodity exports slumped and Brazil's Finance minister, Guido Mantega, predicted the currency will extend its steepest monthly decline since 2002.

    As sugar, oil and metals plunged, related industries shares in the stock market tumbled, the real sank 2.3% to its lowest level since January. Petrobras (oil) and Vale do Rio Doce (iron & metals) concentrate 30% of the Bovespa index.

    This means that the Bovespa index fell below the benchmark of 50.000 and later 49.000 points (48.435) accumulating losses of 6.74% in a week, 14.4% in the month and 24.18% since the beginning of the year.

    The historic maximum was 73.438 points last May 20. Last year the São Paulo stock exchange soared 43.65%.

    Finance Minister Mantega said the Brazilian currency will keep weakening as falling commodities narrow the country's trade surplus and reduce investment. The Brazilian real, which climbed 17% last year, has weakened 8.2% this month and closed Tuesday at 1.7777 against the US dollar.

    "We've reached the limit of the real's appreciation," Mantega said during an event in Brazilian capital Brasí­lia. "And in a way it's good because it won't hinder our exports." He added that the real decline "won't stoke inflation because energy and commodity prices are falling".

    The Central Bank increased the benchmark interest rate in the past three meetings to 13% from a record low of 11.25% in April in a bid to fight inflation at the highest level since 2005.

    Brazil's current account deficit widened to 19.5 billion US dollars in the 12 months to June, the biggest gap in six years as companies stepped up profit remittances and increased imports, pointed out the Central bank.

    Mantega also admitted that global turbulence in financial markets is limiting investment flows into Brazil.

    Mercopress

    Tags:

    • Show Comments (1)

    • joaoh

      there! SO LULA do you think that your talk of nationalizing Petrobras helped the economy? stupid stupid stupid populist

    Your email address will not be published. Required fields are marked *

    comment *

    • name *

    • email *

    • website *

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Ads

    You May Also Like

    Water and climate in Brazil

    Brazil’s Petrobras Wants Public to Help It Spend US$ 300 Million in Environment

    Brazilian oil company Petrobras is going to turn 500 million Brazilian reais (US$ 309 ...

    US Wants a Sharper Eye on Brazil’s Border

    A report by the US State Department informs that Brazil is cooperating with the ...

    Brazil Studying Ecological Impact of Petrobras on the Amazon

    Brazilian researchers started a journey along 400 kilometers of the upper Amazon River as ...

    Cotton Brazil

    Brazil Might Accept Technology Transfer in Lieu of Retaliation Against US

    The Brazilian government and the United States may have satisfactorily resolved a longstanding dispute ...

    Brazil Offers Ethanol to the U.S. and Calls for End to Subsidies

    During his visit to Washington this week, Brazil’s Minister of Development, Industry and Foreign ...

    Indian leader Ambrósio Vilhalva

    Brazilian Indian Leader Murdered Following Death Threats by Landowners

    Brazil’s Guarani Indian leader and film-star Ambrósio Vilhalva was murdered on Sunday night, after ...

    New York’s Brazilian Weekend

    Central Park’s Summerstage, in New York City, had the colors of Brazil this year. ...

    Brazilian prosperity

    While Rich Cut Social Benefits We’re Investing More, Says Brazil’s Finance Minister

    Brazil’s Minister of Finance, Guido Mantega, informed that the Brazilian government will raise its ...

    Brazil Industry Breaks Four-Month Surge, Dropping 2.5%

    Industrial production in Brazil fell 2.5% in July, in comparison with June. According to ...