BRASIL: FinMin Mantegna Blasts China, USA...For Currency Manipulation.

                                          AFP
A frustrated Finance Minister Guido Mantega attacked China and the USA...for manipulating their currencies...at the expense of trading partners.


"Of course, China manipulates it's currency and it (would be) better that the currency could fluctuate," said Mantegna.
"I don't know if in the United States it's exactly a manipulation. It's the quantitative policy that goes to an undervalution of the dollar," he said.


China and the USA are important markets for Brasil's agricultural products.
But its currency...the real...has soared in value...now at it strongest level since 1999...while the yuan and usd have only weakened.

IMF : 23 May UPDATE: More Candidates Emerge; A Challenge From "Down Under" Over Chief.

LINK CHANGE/ AFP

       Australia and South Africa are challenging the convention...since 1944...of appointing a European as head of the IMF.
      They want new IMF management to be chosen on merit...rather than by nationality.
      So, they are backing former South African FM Trevor Manuel (above).
      The two nations may have the support of some emerging powers including China and India.
      Brasil's FM Guido Mantegna recently he said he would support the eurozone's choice.
      But, Switzerland just announced it would not necessarily back a European for new managing director.
      Britain has endorsed Lagarde.
     Australia's neighbor...New Zealand...has also announced its support for her.
     Mexico is backing its own Augustin Carstens...while former Soviet bloc countries are favoring long, long shot  Kazakhstan's Grigori Martchenko.

IMF: Board Predicts New Chief...By 30 June; Lagarde Now Heavy Favorite.

BLOOMBERG/

     Shakour Shaalan, the IMF Executive Board's dean, predicts the board will select a new managing director...by 30 June.
     Meanwhile the jockeying for the top job just became a little clearer...after Brasil's FM Guido Mantegna announced his nation would back the EU candidate--a huge reversal of position.
    Brasil has been one of the most vocal advocates...for a new emerging nations IMF chief.
    The USA has been trying hard...to appear neutral.
     But Mexico is reportedly considering nominating its c.banker Augustin Carstens.
    Clearly in the lead however...is France's FM Cristine Lagarde, 55 (above).
    Italy, Sweden and now reportedly Austria...are backing Lagarde.
    Angela Merkel has lauded...but not yet openly supported her.
    "Christine Lagarde has outstanding credentials,”said Swedish FM Anders Borg.
    Her sex is an “advantage”since “half of the world has not been represented as managing director”of the IMF, he said.
     One observer claims Lagarde is now the “odds-on” favorite for the job after being a “20-1 outsider when betting began.”
     Yet there is a significant blip that must be resolved...a two-decades dispute involving a supporter of President Sarkozy and a settlement of nearly $600 mn usd paid to him by the French taxpayers...that was approved by Lagarde.

BRASIL: 8 April UPDATE: Real Breaks $1.60 Barrier; Mantega's Foreign Tax Extension Seen As Futile; Consumer Loan Tax Doubled.

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    The government has doubled the tax on consumer loans...excluding mortgages. They will now be subject to a 3% annual tax.
     The government wants to slow credit growth to between 12%-15% annually.
    Meanwhile the REAL now registers at $1.5731 usd... for the first time since 2008...continuing to zoom past the psychologically important $1.60 level...even after FM Guido Mantega (pictured) announced the extension of a 6% tax on foreign loans.
    Mantega now calls long-term appreciation “inevitable."
    March inflation there also hit a new high of  6.3%...the most in 28 months,
   “Mantega announced a measure that has zero impact,” said economist Daniel Ribeiro.
   “All the measures we’ve taken have produced results,” Mantega said, adding that the real could be as high as 1.50 per usd withouot the currency curbs. “If we hadn’t acted, then certainly the real would be much more highly valued than it is now.”
     But many analysts now speculate that the REAL will trade between $1.50-1.60 usd... in 2011.

BRASIL: Fitch Upgrades Debt To BBB Adding To Mantega's Currency Dilemma.

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    Brasil's foreign debt rating was lifted from BBB- to BBB by Fitch, the second-lowest investment grade but the same as Mexico, Russia and Thailand.
     The upgrade only adds to FM Guido Mantega's dilemma about the growing strength of the real.
    “The more solid the Brasilian economy becomes, the more it tends to attract foreign investment and dollars, which at the moment is kind of a problem,” Mantega said. “The government will continue to take measures to contain the excess of dollars.”
     “There’s not much they can do other than buying dollars,"claims one analyst.

BRASIL: Real Blasts Thru $1.62 Usd Level; Is The Currency Fight Over?

BLOOMBERG/

   Has the government given-up trying to contain the real's value vs the usd?
   The real just saw its biggest weekly gain since 2009...blasting thru the $1.65 level...and landing at $1.6070 per usd...a 1.5% advance.
   The real has risen 3.4 percent against the U.S. dollar since 28 March, the biggest weekly jump since 17 July, 2009.
    The market speculates that the government would rather slow inflation than fight against a stronger currency.
    On 29 March, the c. bank said the cost is “too high” to cut inflation to its 4.5 percent goal this year from the two-year high of 6.13 percent.
    “Rumors have been circulating that the government abandoned the floor of 1.65 reais, and that now the value would be 1.60 reais” said an analyst.
    However, FM Guido Mantega is said to be seeking ways to lessen capital inflows from outside investors...without hurting infrastructure and industrial investments.

BRASIL: Dilma Faces Union Wage Challenges With Austerity Pledge.

BLOOMBERG/ Luri Dantas/

   Finance Minister Guido Mantega says the government “won’t budge” over demands by unions for an even greater boost in the monthly minimum age even as President Dilma Rousseff (pictured)favors lifting it an additional 6.8 percent this year to 545 reais ($327).
    Rousseff faces the task of cooling inflation from its two-year high and bringing down the high flying real in value.

BRASIL: 11 Dec. UPDATE: Economy Officially Booming With 8.4% GDP Growth; Inflation Also Perking Up.

LAHT/
     Brasil's economy is officially booming.
    Finance Minister Guido Mantegna (pictured) claims that Brasil’s economic growth is second only to China’s.
    It grew 8.4 percent in the first three quarters of 2010 and by 7.5 percent in the 12 months ending Sept. 30 according to government stats. Household consumption climbed 6.9 percent in the first nine months due to income gains and easier credit.
    In 2009, its GDP contracted by 0.6 percent.
    However, incoming President Dilma Rousseff's dilemma is the soaring value of the real vs the usd which makes exports less competitive.

ALSO NOTED:  Prices rose 0.83 percent from October, the biggest increase since April 2005. Inflation expectations for 2011 have accelerated to 5.2 percent, from 4.8 percent in August.
FOR DETAILS, SEE:
 http://www.bloomberg.com/news/2010-12-10/brazilian-analysts-wrong-to-predict-tolerance-for-inflation-barbosa-says.html

 

BRASIL: Mantegna To Slash Development Bank Spending By 50% To Lower Interest Rates.

BLOOMBERG/
     Brasil will cut funding for its state development bank, BNDES, by 50 percent in 2011 to help lower the world’s second-highest inflation-adjusted interest rates.
    Finance Minister Guido Mantega reports that Brasil's rates are second only to Croatia among 46 countries tracked by Bloomberg and is paying 965 basis points more to borrow locally than abroad. The country’s local debt even yields more than troubled Greece and Ireland. He says that is unacceptable.