Financial - 2508 Words

Brazil’s Real Surges as Central Bank Says Inflation Rate Is High By Blake Schmidt amp; Marisa Castellani - Feb 7, 2013 3:33 PM ET Brazil’s real rallied the most among emerging-market currencies as the central bank said high inflation requires attention, spurring speculation that policy makers will let the currency strengthen to contain prices. Swap rates climbed after the government reported that consumer prices increased in January at the fastest pace in almost eight years, adding to bets on a boost in borrowing costs. The exchange rate and tax cuts will help slow inflation, a central bank board member said in a phone interview, asking not to be identified because of internal policy. â€Å"Higher inflation shoots the real up,† Joao†¦show more content†¦According to World Bank, net portfolio equity inflow was $38 bln in 2010, inflow of direct investments totalled $48 bln. Nowadays there is a 1% tax on short dollar positions in the futures market. It was introduced in 2011 in order to limit foreign exchange speculation. In 2012 the Brazilian real proved to be the worst-performing currency among the currencies of developing countries. It had lost about 12% of its price for two quarters 2012. The USD/BRL rate was 1:2.07 by the end of 2012. According to statistical data of Central bank of Brazil, the rate rose by 0.7% in December 2012. In terms of easing cycle Brazil’s central bank cut its benchmark interest rate for nine times during 2012. As a result it decreased by 5%. In January 2013 it was cut to a record low 7.25%. Easing credit climate offering favourable conditions boosted retail sales and competitiveness among local producers. Several f actors have impact on the Brazilian real. Firstly, amounts of attracted foreign investments; the Brazilian industry cannot develop further without it. Secondly, USD trends, as Brazil is a major importer and exporter and the currency of the United States is used as a major currency for international payments. Brazil has a very heterogeneous population as well as financial structure. The country has lack of infrastructure development. It is characterized by low labour productivity. All these factors have negative impact onShow MoreRelatedFinancial Statement Of Financial Statements822 Words   |  4 PagesFinancial Statements The business world requires exacting standards to ensure all costs are correctly accounted for and considered. To this end the financial statements have become the centerpiece for business evaluation. The income statement, balance sheet, statement of cash flow and ratios for analysis of financial statements play a critical role in business evaluation. Income Statement The income statement is a mainstay of business operations and expenses. 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Services are now available in 85% of the countries where the vast majority of the population lacks access to formal financial institutions, and in six out of seven markets whereRead MoreRegulation Of Financial Institutes : Financial Institutions1344 Words   |  6 Pages REGULATION OF FINANCIAL INSTITUTES Financial institutions provide different kind of services. Depository institutions like banks, savings, loans and credit unions transform liquid liabilities like checking accounts, current accounts, and certificates of deposit that can be cashed in prior to maturity into relatively illiquid assets, such as home mortgages, house loans, loans to finance business inventories and accounts receivable, and credit card balances. These institutions also operate the payments