Brazil's macro-economy has been through two enormous shocks in the space of three years as the réal...
Brazil's macro-economy has been through two enormous shocks in the space of three years as the réal has slipped from near parity to the US$ dollar to nearer R$3 during October. Arminio Fraga, head of the Central Bank, told us he had hoped for a four to five-year adjustment process for the external account, the transition comfortably financed by plentiful foreign direct investment. Unhappily, the synchronised global slowdown, a sharp reduction in FDI to half the run-rate of 2000 and a steady escalation in the Argentinian crisis truncated this adjustment into only nine months. Hap...
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