Unbelievable, but Brazil is resisting and denying

Unbelievable, but Brazil is resisting and denying

In the financial markets, there is no doubt that these are not alone Volten free market forces due. Instead, analysts believe that the central bank systematically intervened in the currency market to weaken the real by buying dollars. Brazil was one of the first countries that resisted. On 12 April 2008, the dollar was trading at 2.51 Real. An exchange rate of the Brazilian economy could only dream of years later: On 26 July 2011 we got in the currency markets for a dollar only 1.53 Real. On this Monday, the figure was again at 2.03 Real. Until recently, the government has denied this, but still, even if Finance Minister Guido Mantega 2010 as the first politician of a global "currency war" language, must defend themselves against Brazil. Industrialized countries and China weakened his view artificially after their currencies to gain trade advantages. Late last year, he was then for the first time officially, want to control the exchange rate. Cash Flow brake With the interest rate reductions and short-term effect of capital controls, the speculative inflows of foreign capital decreased in search of high-yield bonds in Montreal. Last year, Brazil eased slightly so the interventions. The central bank was also lower export revenues to help because of global hunger subsided after Brazilian commodities. In fact: First 2010 Brazil increased its tax on foreign investment income of 2 percent to 4 percent and then gradually lowered the prime rate. In August 2011, the Central Bank of Brazil reduced its key rate, although at that time large inflation concerns prevailed. After a total of ten additional downgrades the prime rate has since fallen from 12.5 percent to 7.25 percent. Because it reduces the foreign exchange flows to Brazil than in previous years, eased the upward pressure on the real. Recently, however, more money flowed into the country, because a number of Brazilian companies spent bonds. Among them was a Bond than $ 7 billion of state oil company Petrobras. Because of the higher yields in emerging markets was also here and the demand increases again. Price bubbles by capital inflows In Norway experts see because of the high foreign demand a price bubble in the housing market. At least it is currencies like the Norwegian krone and particularly the Australian dollar appreciation potential awarded, as the Swiss franc. Other countries, which are rich in natural resources, experienced in recent years appreciation of its currency, including Australia and Norway. The central banks of the developed countries newly created money is also flowing into commodities, pushing the economy of these countries - sometimes up to overheat. Swiss success The calculus was: The course was, and since then, investors rely less on the disintegration of the euro area, evaluates the euro against the Swiss franc on even. Currently, one euro must be paid back 1.25 francs. The companies breathe, economic growth increased slightly. The central bank of Switzerland, by then one of the most conservative central banks in general, has increased fivefold in the past five years, its balance sheet. The extra money she has predominantly used to stop the appreciation of the Swiss franc against the euro. Already in June 2009, the SNB intervened in rates of 1.50 francs per euro, because they sensed the danger of deflation. As the franc in September 2011, almost one euro was worth it and complained export and tourism industry over the loss of competitiveness, the Swiss central bank lost all restraint. They also announced that they will use every euro sellers at rates of 1.20 francs per euro. Switzerland has therefore, as it looks now, won the "currency war". But the price was high: The total assets of the SNB has swelled to 75 percent of annual economic output Switzerland (GDP). The assets in the balance sheet of the central bank are rated rare in France, according to data from September, the SNB takes itself to 48 percent in euros and 28 percent in dollar-denominated securities. Thus, the SNB is very dependent on currency exchange rates. ECB reticent However, had the European Central Bank to its President Mario Draghi from the summer of 2012 to purchase unlimited government bonds, if this is to maintain the euro area may be required to leave no deeds. Also why has the total assets of the ECB in the last five years doubled "only" and is now about 30 percent of the economic output of the euro area. For the longest time, the National Bank of Japan to escape with new bond purchase program of deflation. Hardly a currency is currently evaluating degrade as the yen, which had, however, counted in previous years, the strongest currencies in the world. For eleven weeks, the Japanese currency is now evaluating from the dollar after the government in Tokyo could successfully undertake the central bank to buy government bonds so long until the inflation rate has increased to 2 percent. England expands money supply most Total assets of the Bank of England is now as large as about 25 percent of annual economic output of Britain. Last but not the buying programs were further expanded in London. Unlike in America: The U.S. Federal Reserve (Fed), which last year briefly mainly exchanged for ongoing long-dated securities, without the total assets significantly expand purchases, in 2013 again unlimited government and mortgage bonds. It has total assets of the Fed from 2007 to 2011 and has already quadrupled in some risen from 7 to 20 percent of the magnitude of the U.S. gross domestic product. Most of all central banks of the industrialized countries, the Bank of England has expanded the money supply. Their total assets primarily through purchases of government and mortgage loans with which it wants to keep the long-term interest rates low, six-fold in the past five years. Ironically, South Africa has not benefited This in Washington certainly desirable trend could continue in 2013, especially just to currencies of commodity-producing countries, such as the Australian dollar. Especially this pair - U.S. to Australian dollar - applies to certain capital market as the most important measure for supporting the risk appetite. Because of this course shows that commodity prices down and with it the world economy. Something else, the success of "currency wars" read. Although the dollar was just wondering in the euro sovereign debt crisis from mid-2010 and mid-2012 as a safe haven. But to a basket of six currencies, in which the euro is weighted at 58 percent at its highest, the dollar has depreciated significantly just since mid-2012. A country that the "currency war" is not profit, just South Africa. From early 2008 to mid-2011, the South African rand depreciated though of 11.37 per dollar by almost 42 percent to $ 6.57. Then he lost another 25 percent of its value, closing on Monday at 8.98 per dollar margin. Recently, the price fell even at the lowest level in three and a half years. Guilt was not the South African Reserve Bank: analysts make of this development, the unstable political situation in the country and responsible riots and strikes in the mining industry. In contrast to countries such as Brazil, want to protect themselves from excessive capital inflows, South Africa is due to a low savings rate and to finance the deficit depends on the inflow of capital from abroad and tried to strengthen the confidence of investors in their country.