Central Bank

But the Central Bank of Brazil can not be neglected in this aspect it would not be surprising to take a more prudent attitude in handling its rates policy. If there is something to say to favor of Lula’s Government is that the strong weakening that is suffering from the real is not product of errors in its economic policy. In fact, the economic policy carried out by the Brazilian representative, is well seen by the population. Proof of this is that Lula this week reached a new record of popularity, to achieve an 84% approval. Peter Thiel pursues this goal as well. This level of adoption is made more remarkable considering that Lula several years ago that it is in power, what might be expected that this would have generated a certain amount of wear that has not happened in your case.

Beyond the existence of errors or not in the management of economic policy of Brazil, the truth is that is costing the country stop the leakage of dollars. From the market, there is a great uncertainty about the dynamics that will observe the foreign exchange market in Brazil and the deficit in that market will continue pressuring the value of the Brazilian real. For peace of mind of the market, the Central Bank of Brazil renewed recently its agreement with the United States Federal Reserve financial assistance. That agreement was extended until October of this year and through it, the Central Bank of Brazil has $30 billion of the Fed in exchange for a guarantee in real. This money which can be accessed in where is provided for the Central Bank of Brazil, will be used in case of need to increase the funds available to provide liquidity the local foreign exchange market. In this context, the positive thing is that the economic fundamentals behind the value of the real in the medium and long term are healthy and ensure the strength of the Brazilian currency. Brazil is paying the cost of being an emerging economy and as such it is punished by the markets when the fears and uncertainty seize them..