Assets To Remain Unshaken By New Tax

The Brazilian authorities have stepped up their efforts to curb the relentless strengthening of the Brazilian real against the US dollar. The currency has appreciated by 31.5% against the greenback year-to-date, making it the top performer among all major global currencies. Attempts by the Banco Central do Brasil (BCB) to slow the real's appreciation by purchasing dollars on the open market since May 8, have had little success. International reserves climbed 13.5% since May to measure a record high of US$221.6bn in September. Nevertheless, the enormous carry appeal of the real, the high level of exposure to a wide range of commodities and Brazil's rapidly improving macroeconomic fundamentals have kept the real's appreciatory path firmly in place.

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