Investment In Brazil

“International investors remain enamored of Brazil? From Tuesday 20, foreign capital is taxed in Brazil by 2% by the IOF (Tax on Financial Operations), applying both fixed income as variable. Presidential Decree 6306 provides that the tax is subject to the settlement of exchange operations for the entry of resources into the country made by foreign investors, for application in the financial and capital market. The financial market reaction: The Bovespa fell in the first days after the tax 5% and ended up closing a 3% negative, and the dollar closed at R $ 1.743, an increase of 2%, having reached R $ 1.766 at the maximum of day. The companies in the Bovespa perdierona U.S. $ 55,000 million. Despite the tax, the dollar fell again: yesterday closed at R $ 1.725. The central bank of Brazil purchased U.S.

$ 6,000 million in the first weeks of the month, coming to join the country’s international reserves to a record U.S. $ 232,000 million. On Monday a record was marked for the Bovespa: the balance of foreign investment reached U.S. $ 23,000 million, reaching almost to recover the lost in 2008, about U.S. $ 24,620 million. The same day that marked the highest rate of year 67 239 points, up from 79% in the period, mainly driven by the good performance of commodity prices that drove miner Vale (BVSP: VALE3; NYSE: VALE ) and the oil company Petrobras (BVSP: PETR3; NYSE: PBR). This comes after last Friday, the Brazilian President Lula da Silva a denied creating any charge on foreign capital: a OEDE economy these things, people can not talk.

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