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Exchange rate crisis unlikely for Brazil: ex-minister

09-27-2011 11:33 BJT

RIO DE JANEIRO, Sept. 26 (Xinhua) -- A near-term exchange rate crisis looks unlikely for Brazil despite last week's currency fluctuations, said one of architects of the "Brazilian Miracle."

Antonio Delfim Netto, also a former finance minister, told a seminar in Sao Paulo that Brazil is "reasonably protected" against a crisis, not only because of its ample foreign exchange reserves, but also because of the market's tendency to accommodate.

"The exchange rate first produces unbalance and then balance. A crisis is very unlikely," he said.

Last Wednesday, the Brazilian real depreciated 3.75 percent against the U.S. dollar, hitting a new low since June 2010 and prompting Finance Minister Guido Mantega to blame European debt crisis and ensuing risk aversion measures for real's dip.

But according to Delfim Netto, who served as finance minister from 1967 to 1974 and as planning, budget and management minister from 1979 to 1985, the current appreciation of the dollar is not limited to Brazil. Rather, it is a worldwide trend.

"This appreciation of the U.S. dollar has nothing to do with us. It's got to do with the external scenario. All currencies, except the yen, have depreciated (against the U.S. dollar)," he said.

 

Editor:Zhang Rui |Source: Xinhua

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