The World Is Moving Towards A Comprehensive Trade War And New Measures To Curb Domestic Currency Will Be Introduced.

Brazil's finance minister Mantega said in January 9th that the global exchange rate war is changing.

In the near future, the government of Brazil has frequently introduced measures to suppress

Us quantitative easing as the fuse

Mantega, in an interview with the financial times 9, said: "according to the prediction of the International Monetary Fund (IMF), China, India and Brazil will continue to lead the world in 2011 and 2012.

When asked whether this prediction meant the end of the global exchange rate war, he did not hesitate to answer "no".

He said: "no matter" cold war "or" total war ", exchange rate war always exists.

Mantega said: "exchange rate policy is one of the main driving forces of national competitiveness, and its role even exceeds that of labor productivity.

Therefore, even if the US economy recovers, they will still maintain the quantitative easing monetary policy, because the policy is essentially a trade strategy, which will also force other countries to do their best to defend their own interests.

The exchange rate war is changing into a trade war.

Mantega began to serve as finance minister in Brazil in 2006.

In September 2010, Mr monce raised the term "exchange rate war" and triggered a heated debate around the world about competitive currency devaluation.

In January 1, 2011, Brazil's new president, Rousseff, came to power. Mantag was appointed as Brazil's finance minister.

Continue to move to curb currency appreciation

Data show that, since the influx of hot money, since 2009, Brazil real has appreciated more than 35% against the US dollar.

In order to curb the excessive appreciation of the local currency, the Brazil government raised its financial fixed rate investment tax rate (IOF) from 2% to 6% in 2010, and raised the foreign exchange derivatives trading tax rate from 0.38% to 6%.

In addition, Brazil has entered the foreign exchange spot market through buying dollars and selling Real to intervene in the exchange rate of the local currency.

In this regard, moutca said that the above measures have achieved certain results, and foreign investment in Brazil showed a net outflow in December 2010.

He said: "(foreign exchange) spot market has achieved a balance, and now (Real appreciation) pressure comes from the futures market.

The government is preparing for more similar measures. "

In January 6, 2011, Brazil came up with a new strategy to curb currency appreciation.

The Central Bank of Brazil has announced that if a local banking institution requires more than $3 billion in short positions in the foreign exchange market, it will have to deposit 60% of its positions in the Central Bank of Brazil without any interest income.

Meng Dexi, director of monetary policy of the bank, predicted that the move would enable Brazil bank's dollar short position to fall to $10 billion from $16 billion 800 million at the end of 2010 in 90 days.

However, analysts believe that the Brazil government and the central bank's series of initiatives in the short term or to suppress the appreciation of the local currency, but in the long term, the effect is unpredictable, because Real has strong support of fundamental support, that is, Brazil's economic performance is strong.