US dollar inflows to Brazil nearly tripled to $65.28 billion in 2011 from the previous year, marking the second biggest annual foreign exchange intake on record, according to central bank data released on Wednesday. A jump in the price of key exports like iron ore and higher foreign investments at the start of 2011 fuelled massive dollar inflows.
The higher dollar intake bolstered the local currency, the real, during the first half of last year. However, a global economic slowdown is hitting trade for the commodity powerhouse, increasing the amount of profits sent to parent companies overseas and prompting investors to take their dollar investments elsewhere. In December, $1.94 billion exited the country, according to central bank data. Dollar inflows totalled $24.35 billion in all of 2010.
The real weakened 11 percent against the US dollar in 2011. The European debt crisis prompted investors to be wary of emerging market risk and brought tougher government controls over capital inflows. Brazil saw its US dollar intake surge to $87.45 billion in 2007, before the 2008-2009 global financial crisis that scared off foreign investors and hit demand for local products like coffee and soy.
A gloomier global economy, with Europe heading toward recession, is seen curbing Brazil's trade surplus in 2012. The country's trade surplus soared 48 percent to $29.79 billion in 2011. The central bank's historical data on forex inflows goes back to 1982.
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