In another move to curb speculative inflows of money, Brazilian finance minister, Guido Mantega, has raised the IOF tax on inward fixed-income investments by a further 2% to 6%.
The IOF tax on margin deposits for futures positions held by foreign investors has also been raised to 6% from 0.38%. The real gained 1.4% since the first rise in IOF tax on fixed-income investments on Oct. 5.
Brazil's high interest rates - the Selic base rate is set to remain at 10.75% for the time being - stand out against the near-zero rates in the US, Japan and other developed nations.
Although upward pressure on the Brazilian real has abated for the moment, many commentators predict that pressure will resume.
.Tags: tax | investment | banking | capital markets | Brazil | interest | fiscal policy | currency
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