Monday, November 8, 2010

Currency War: The Next Battle

In Brazil, the hot topic continues to be the strong BRL vs the USD - even after a formula one weekend, a new president and creaking infrastructure.

Prior to the G20 Summit, The Exchange War has become a commonplace buzzword in the economic and business press, and is creeping into the common news.

In Exame, a business magazine, "weapons" in the currency war are being prepared by the Brazilian government including even higher duty rates for capital inflows (today at 6%) and charging capital gains taxes from foreign investors (a ghost of the past). But all these weapons are currently on hold until after the G20 meeting in Seoul. Keep your eyes open...

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