Brazil's central bank chief said on Sunday that the recent devaluation of local real impact on inflation, "limited", but the bank ready to intervene if necessary to suppress currency fluctuations.
Real dollar closed at 2.1412 yuan on Friday, in May 2009, the lowest level since, as worried about the U.S. economic stimulus measures by local investors and speculative currency weakening tolerance policy makers may withdraw from increased global risk aversion .
"This is a global movement, the dollar is not unique to Brazil," Alexander · Tombini said the bank's press office at a news conference in Istanbul, Turkey, to provide advice. "As long as a flexible exchange rate regime, as it is the case in Brazil should be limited through."
Tombini attended by the central bank in Istanbul, Turkey seminars.
Sharp real depreciation could push up the value of imported goods in the South American countries, instigating already high inflation, and only two years ago suffered hyperinflation.
To combat inflation, the central bank surprised investors Wednesday with 50 basis points rate hike pace of monetary tightening cycle.
In theory, it should really ease the pressure on interest rates, the Brazilian fixed-income assets, into the local market to attract more dollars, because it increases the appeal.
However, neither the interest rate nor the central bank intervention (Friday) on the market can really hold up.
Tombini reiterated that the bank may intervene again to curb "excessive volatility" in the reality through the cash and futures markets, and sell currencies, the dollar's trade credit line for export.
Exporters to Brazil's central bank to provide trade credit in 2008, the global financial crisis, external financing dried up.
In the 12 months to mid-May, the inflation rate slowed to 6.46%, slightly lower than the 6.5% official target range limit.
 



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