Has the Financial Crisis Corrected the Exchange Rate in Brazil?

Previous international financial crises have in general caused a severe devaluation of the currency in emerging economies like Brazil. The currency crises had very negative consequences for the entire economy, always expressed as an increase in the domestic interest rate and a fall in gross domestic product. However, during the crisis that started in August […]

US Dollar Weakness: Now and Afterwards

As a Latin America Monitor blogger I am not expected to write about US economy. But allow me to address some questions about the recent weakening of the US Dollar. I am doing that most likely because as an undergraduate in Brazil in the early 1980s I heard quite a lot about an imminent Dollar […]

Inflation Risk in Brazil and the Latest CB Decision

“Having assessed the macroeconomic outlook and the prospective inflation scenario, the Copom unanimously decided to raise the Selic interest rate to 11.75 percent p.a., without bias. The Committee understands that the decision to immediately materialize a relevant part of the basic interest rate move will contribute to a prompt retraction in inflation risk and, as […]

Will Brazil decouple from the US slowdown?

In the current financial turmoil experienced by the world economies, one very important question posed by analysts and policymakers alike is whether emerging markets, such as Brazil, will be able to decouple from the US slowdown. The aim of this article is to point out ten issues, regarding this decoupling concern and, on top of […]

Globalization and Inflation in the Brazilian Perspective

Since 2005 inflation expectation in Brazil is remarkably tamed. It is really great news, especially because of the country’s history of high inflation and heterodox plans. Not only inflation expectation is under control, but also its inertial component has faded away. Starting on September 2005, Brazil’s Central Bank has gradually decreased the interest rates in […]