Brazil’s government plans to “maintain a devalued real” using various mechanisms to anchor the currency at a lower exchange rate that will help maintain competitiveness, Finance Minister Guido Mantega told TV Band.
“We cannot lose competitiveness at a time like this,” Mantega told Band in an interview published on the broadcaster’s website today.
Brazil’s real, whose 10.6 percent decline against the U.S. dollar over the past three months makes it the worst performer among all 31 major currencies tracked by Bloomberg, was down 0.2 percent to 2.0335 at 10:26 a.m. local time.
Brazilian manufacturers have lost market share in recent years to goods from China as the strong real has lowered the cost of imports. Before Europe’s worsening debt crisis led investors to dump riskier emerging market assets, President Dilma Rousseff’s government had raised taxes in a bid to stem foreign capital inflows that boosted the real to a 12-year high of 1.5391 per U.S. dollar on July 26, 2011.
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