BRASILIA: Brazil will slap a six-percent tax on loans with terms under two years secured from foreign banks and firms, Finance Minister Guido Mantega said Wednesday. Previously, the tax applied to credits under 360 days.
"The international market has a great deal of liquidity," Mantega told a news conference.
"There is a lot of credit in US and European monetary policies which are expansive; there is too much cheap credit," he stressed.
"We want to reduce the supply of credit for the Brazilian economy that was coming in through that channel," he said referring to financial speculators who take short-term credits abroad in order to place them for such short periods in Brazil where interest rates are higher. Since early this year, the real has increased about 1.76 percent against the dollar, up from the last day of trade in 2010 (at 1.66 real). Last year, the real saw total growth of 4.6 percent, compared to 32.7 percent in 2009 against the dollar. The Brazilian currency had dropped 23.17 percent against the greenback in 2008 due to the global financial crisis.
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