August 2011 Brazil Business Review Now Available from Brazil Business Today
SAO PAULO, Sept. 2, 2011 /PRNewswire-USNewswire/ -- The U.S. credit rating downgrade dominated Brazilian news in early August, but Brazil said it had no plans to sell its U.S. Treasuries or change its foreign currency reserves, despite being the fourth largest holder of U.S. treasuries.
Nevertheless, Brazil's stock market, already at its lowest level in two years, felt the effects of the U.S. downgrade. Later in the month stocks began to bounce back on improved inflation forecasts, but the Bovespa still ended August down 4% for the month and 18.4% for the year.
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Although Brazil itself made no drastic policy changes after the U.S. downgrade, the Union of South American Nations met to discuss coordinating policies of member countries to deal with the continuing economic crises in the U.S. and Europe. One of South America's biggest concerns is currency appreciation. The Brazilian real is the world's most expensive currency, prompting the government to slap a tax on currency futures in late July. Despite such continued efforts, the Brazilian currency remains strong.
Although Brazil boasted that it was in a strong position to weather another global crisis immediately after the U.S. credit rating downgrade, the country is now beginning to react to the economic downturn in developed markets. On the last day of August, Brazil's central bank cut its benchmark interest rate from 12.5% to 12%. The cut came after reports showed industry results and industry job creation fell short of expectations during the month of July. The move came as a surprise and is most likely a signal to Brazil's industry that the central bank will act to keep Brazil's economy growing.
About Brazil Business Today
Brazil Business Today is a news analysis and monitoring service for business leaders and global professionals worldwide who need up-to-the-minute information related to Brazil. Our media monitoring service scans more than 7,000 sources of information worldwide, and our on-the-ground team in Brazil ensures that you are getting the most relevant content on the world's seventh largest economy.
SOURCE EIN News
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