Survival Mode: Brazil Tries to Tough Out Emerging Market Selloff
Brazil is getting battered by the bears who are betting against a bolstered economic boon for the rest of 2013.
The country has been in a slump lately as efforts by the Brazilian central bank have so far yielded very little in stopping the traumatic slide of the real as the currency continues to give ground against the dollar. The real isn’t alone, either: The Turkish lira and Indian rupee join a host of currencies that are potentially destroying their countries’ short-term economic prospects as emerging markets are getting dumped in favor of equities elsewhere, according to The Economist.
However, the Brazilian government isn’t taking the news passively. Lawmakers there are desperately trying to avoid an outright disaster, and moves have been made to auction $1 billion worth of loans and $500 million worth of foreign exchange swaps four days per week. These moves could help slow the tide, but capital inflows will be needed from investors to help calm the storm.