More speculation has arisen on whether Brazil could take further short-term measures to stem the rise of its currency following Dilma Rousseff's election as President.
Roussef has advocated fiscal measures that would ease the pressure by reducing interest rates and refered to the “currency war” that has seen the real strengthen 36% against the dollar since the end of 2008, implying that she could contemplate some form of engagement.
Luiz Awazu, central bank deputy governor and voting member of the rate-setting committee, admitted this week at a conference in Buenos Aires that temporary measures to stem capital inflows were possible.
Analysts speculate that the IOF tax could be extended to include equity market purchases. The IOF tax on fixed interest bonds was raised twice in recent weeks, to the present 6% rate. Another option could be to vary the tax rate depending on the length of the investment.
.Tags: tax | investment | Brazil | interest | currency
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