"No Country in the World Can Hold the Dollar"
Source: Bloomberg, Arnaldo Galvao and Andre Soliani (9/21/10)
"Brazilian CB says policymakers can do little about weakening USD."
"No country in the world can hold the dollar," Meirelles said today during a speech in the city of Curitiba. He said his comments weren't specifically tied to the Brazilian currency's value.
Brazil's real has gained 34% against the dollar since the beginning of last year, the second-best performer among the world's 16 most-traded currencies. A stronger real makes the country's exports more expensive in dollar terms, cutting into companies' profits.
Finance Minister Guido Mantega, speaking at an event in Rio de Janeiro last week, vowed to take measures to prevent the real from strengthening to prevent damage to exporters. He said that the Treasury had "unlimited" resources from its sovereign wealth fund to buy dollars.
The central bank purchased about $4 billion in the first four days of last week as the real jumped to its highest level since December, according to estimates by BGC Liquidez DTVM, the second-biggest currency broker on Brazil's futures exchange, and Tendencias Consultoria Integrada. The purchases would be the largest over a four-day period since October 2008, when policymakers bought a record $4.6 billion.
The real dropped 0.4% to 1.7283 per U.S. dollar at 3:26 p.m. New York time.