Bloomberg News

Brazilian Real Declines After European Meeting Is Canceled

October 25, 2011

Oct. 25 (Bloomberg) -- Brazil’s real weakened after the U.K. said tomorrow’s meeting of European Union finance ministers was canceled, reigniting concerns there won’t be a quick solution to the region’s sovereign debt crisis and reducing demand for higher-yielding assets.

The real fell 0.9 percent to 1.7658 per dollar, from 1.7506 yesterday, extending its decline this year to 5.9 percent.

Global exasperation with Europe’s response to the crisis deepened today, with politicians from Australia to North America prodding the euro area to get ahead of the crisis before it infects the world economy. Summits of the 27 EU leaders and 17 heads of the euro area will take place as scheduled tomorrow, EU President Herman Van Rompuy said.

“There isn’t going to be a miracle” to resolve the European debt crisis, Hideaki Iha, a trader at Fair Corretora de Cambio e Valores, said in a telephone interview from Sao Paulo.

Yields on Brazil’s interest-rate futures contract due in January 2013 rose one basis point, or 0.01 percentage point, to 10.42 percent.

Brazil’s government isn’t considering changes to the way returns on savings accounts are calculated, Finance Minister Guido Mantega told reporters in Brasilia.

Valor Economico reported earlier today that the government was studying a proposal to tie payments in the saving account to the benchmark Selic rate. Such a proposal should prevent a decline in the central bank’s lending rate from reducing the attractiveness of government bonds, the newspaper reported, citing a government official it didn’t identify.

--Editors: Glenn Kalinoski, Brendan Walsh

To contact the reporters on this story: Gabrielle Coppola in New York at; Ye Xie in New York at

To contact the editor responsible for this story: David Papadopoulos at

Toyota's Hydrogen Man
blog comments powered by Disqus