SÃO PAULO, Brazil - Brazil on Tuesday threatened, tougher capital controls and other measures to keep its currency rise against the dollar, a day after the Chilean Central Bank one own 12 billion dollar plan to buy greenbacks presented.
The trains underline concerns about a weaker U.S. currency in many emerging markets.
"We go to our American friends to melt the dollar to enable" Brazilian Finance Minister Guido Mantega told reporters at a press conference in Brasilia. Mr Mantega previously described the USA's plan to pump $600 billion in the economy as a bid to weaken the dollar to US exports unfair subsidies.
While the specific economic stories vary from countries like Brazil and Chile, share a common theme: A declining US dollar which combined with investor optimism for commodity-rich emerging markets a flood of foreign portfolio investment to these Nations - send your rising currencies.
The strong currencies make exports less competitive and domestic manufacturers more vulnerable to competition from foreign.
For example, the Brazilian producers are increasingly into the arms of increasing market penetration of imports from China, which has accused keeping its currency artificially low by you with the dollar. Brazilian officials said on Monday it China while strengthen an official visit in April lobby would its currency. In recent weeks Brazil moved import taxes to keep Chinese toys.
Currencies are in many emerging economies is increasing. But movements in Latin America have State. Brazil's currency is more than 35% against the dollar since early 2009, and some economists consider it the world's most overvalued currency. The Chilean peso is not far behind, increasing more than 10% since in just over six months.
Said late Monday, the Chilean Central Bank some $12 billion dollars to the rise of the peso against the dollar would begin stubborn buy it. The Chilean peso is copper climbing rises to record levels. The Andean nation boasts some of the world's largest copper mines which is about half of Chilean exports.
In Brazil, the real is rapidly some investors casting because global money in the rapidly expanding South American nation to cash in on his high interest rates. Brazil's Central Bank has set - inflation amid increasing public spending to interest the 10.75%—among clog the highest in the world.
While Mr. Mantega promised enough to government spending his press conference to launch the Central Bank easing prices allow to trim. But many economists are skeptical that the brand new Government of President Dilma Rousseff - faced with massive welfare and infrastructure requirements - may well make the promise.
Meanwhile, Mr. said Mantega Brazil contain an array of weapons, the dollar slide.
In October, for example, Brazil tripled a tax on foreign investments in some bonds. Brazil has also thrown in the past import duties industries before less expensive foreign were to protect.
Capital controls and currency were interventions once taboo, because you can have adverse effects. But now back official at the International Monetary Fund and other institutions to avoid the measures as a temporary way to volatile ups and downs of capital.
Write toJohn Lyons at the john.lyons@wsj.com
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