Guido Mantega, Brazil’s Finance Minister is not likely to attend the South Korean meeting of the G20 this week. He is set to stay in Brazil to watch over the implementation of new monetary policies which are designed to curb gains in currency.
Mantega will send Marcod Galvao, the secretary for international affair for the Finance Ministry, in his stead. He does plan, however on attending the G20 heads of state summit with Brazilian president Luiz Inacio Lula da Silva from November 8 to 15.
Also not in attendance is the president of the Central Bank Henrique Meirelles, because it is scheduled in conflict with the bank’s meeting on monetary policy. He is sending the bank’s director for international affairs, Luiz Pereira instead.
The cancellations come as Brazil struggles with the strengthening of its currency and the negative impact this is having on the nation’s balance of payments. Early in the month Brazil raised its Financial Operations Tax from 2 percent to 4 percent on incoming foreign investments in a measure to recoup losses, however Mantega has also hinted that measures in Brazil’s derivative markets may be on the cards, including placing limits on leveraging exposure to risk.
Brazil’s currency has gained nearly 5 percent to the US dollar since September, with a total increase on the real coming to about 30 percent in the last 18 months. Mantega has said that the weak dollar, and the strong real are the results of a world-wide currency war, while officials and industry leaders at home complain that the strong real is hurting exports and Brazil’s current account balance.
