November 4, 2010

Brazil ready to retaliate for US move in 'currency war'

John Paul Rathbone & Jonathan Wheatley

Brazil, the country that fired the gun on the so-called "currency wars", is girding itself for further battle.

Brazilian officials from the president down have slammed the Federal Reserve's decision to depress US interest rates by buying billions of dollars of government bonds, warning that it could lead to retaliatory measures.

"It's no use throwing dollars out of a helicopter," Guido Mantega, the finance minister, said on Thursday. "The only result is to devalue the dollar to achieve greater competitiveness on international markets."

At a joint press conference with president-elect Dilma Rousseff, outgoing president Luiz Inácio Lula da Silva said on Wednesday he would travel to the G20 summit in Seoul with Ms Rousseff, ready to take "all the necessary measures to not allow our currency to become overvalued" and to "fight for Brazil's interests". "They'll have to face two of us this time!" he said.

Posted by jez at November 4, 2010 5:00 PM | Subscribe to this site via RSS:
Posted to Current Events | Investing | Taxes