Central Bank To Halt Rising Dollar

Brazilian Central Bank President Alexandre Tombini told the Senate Comissão de Assuntos Econômicos (Economic Affairs Committee) today that the Bank will continue to intervene in the foreign exchange market to halt the rise of the US Dollar against the Brazilian Real. He warned of continued volatility in the exchange rate which he said is being caused by economic turmoil in Europe.

The Central Bank brought the dollar down from a high over R$1.90 last week to R$1.806 today. The
52-week range has been R$1.5280 to R$1.9493.

The government fears that a rising dollar could add to Brazil's inflation rate. The Bank said a weekly survey of leading economists now expect the rate to reach 5.53% in 2012, slightly higher than the 5.42% rate they expected in the last weekly survey.

Rock in Rio Jumping and Jiving

The Rock 'n Roll festival Rock in Rio--now in its 26th year--is in full swing in Rio's "Cidade do Rock," with the Red Hot Chili Peppers presenting a show early this morning (1:20 a.m. Rio time). However, at least two groups of "bandidos" took advantage of the presence of all the foreign and Brazilian tourists and held up two hostels--one in Botafogo, the other in Leme, in Rio's Zona Sul (South End). Besides all the cash, jewelry, laptop computers and other stuff, they also made off with tickets to Rock in Rio. Fortunately, no one was hurt. On Friday, another 30 persons attending the rock concert also were robbed not too far from the main entrance.

Let's hope the authorities are able to get this kind of activity under control before Brazil hosts the 2014 Soccer World Cup and the 2016 Olympic Games.

Presidente Dilma on the cover of Newsweek

Brazilians are justifiably proud of President Dilma Rousseff's recent and triumphant arrival in the U.S. this month. Not only did the fomer revolutionary open the U.N. General Assembly, she also was featured on the cover of Newsweek magazine.

Let's hope she doesn't suffer the same fate as former Brazilian President Janio Quadros: he was on the cover of Time magazine on June 20, 1961, only to be out of office on August 25, 1961. I was a reporter for UPI in Rio back in those days. Janio expected his resignation would give him even more presidential powers, because either the Brazilian people or the Brazilian military would reject his resignation for fear that his leftist vice president João "Jango" Goulart would take over the office after he returned from a visit to Communist China.

Alas, he miscalculated and his resignation was accepted, with Goulart eventually assuming the presidency--though with restricted powers. The political crisis dragged on until August 1964, when the military stepped in, ousted Goulart and installed General Castello Branco as the new president.

Dollar takes a roller coaster ride in Brazil

The US dollar had a wild ride last week against the Real. At the beginning of the week it took 1.72 Reais to buy a dollar. But towards the end of the week that had jumped to 1.90 Reais for a dollar. The 52 week range was 1.5280 to 1.9033. The dollar closed the week at 1.8684. Brazil’s Central Bank will be watching the exchange market very closely next week in an effort to calm down foreign currency traders.