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Brazil. Russia. India. China. Four rising powers. One blog to explain them all.

Brazil's currency woes

Brazilian real keeps climbing against the dollar

The Brazilian real reached another high today, hitting an exchange rate of 1.6 reals to the dollar. The Financial Times now says that the government might announce new measures to restrict inflows of money that are driving up the currency. The main reason for the surge is Brazil’s interest rates: they are already among the highest in the world and many investors expect the government to keep raising them in the fight against inflation. The high rates mean high returns for foreign investors. Their rush to buy reals to do business here is what’s causing the real’s value to spike in the first place.

So for gringos living here and paid in dollars—and foreigners visiting—today’s news means that this already-expensive country just became even more dear. And I don’t mean lovable.
 

http://www.globalpost.com/dispatches/globalpost-blogs/bric-yard/brazils-currency-woes

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