Brazil wants IMF-led FX manipulation index-report

* Brazil’s Mantega to propose FX manipulation index at G20

* Idea is to identify currency manipulators-report

* Could support eventual action at WTO

BRASILIA, Oct 28 (BestGrowthStock) – Brazil’s Finance Minister
Guido Mantega will propose at the Group of 20 nations meeting
next month that the International Monetary Fund create an index
measuring currency manipulation, local media reported on

The idea is to identify who is keeping their currency
artificially low to boost exports, Mantega said, lending
support to eventual actions against illegal subsidies at the
World Trade Organization.

“The IMF would have to come up with a method to measure
which currencies reflect the structural situation of their
countries, which are floating currencies, and which ones are
forcing their hand,” Mantega told O Globo newspaper in an

The next step would be to make a deal to reduce such
intervention, and if that didn’t happen the manipulation could
eventually be considered a commercial subsidy, Mantega said.

“In fact, the WTO considers currency manipulation to be a
commercial subsidy that has to be avoided and could result in
sanctions”, he said.

Many countries are already taking measures to devalue their
currencies, Mantega said, highlighting Japan and South Korea.
An IMF index would bring greater transparency, he added.

Brazilian officials have been at the forefront of a global
battle on currency intervention, criticizing the monetary
policy of advanced countries while taking measures at home to
halt the rise of the real (BRBY: ).

Over the past month, Brazil tripled a tax on foreign
investment in local bonds, closed a series of loopholes to make
the tax more effective and raised a tax on the collateral
investors must put down to trade in the futures market.


Graphic on intervention:

Analysis on Brazil’s forex reform: [ID:nN26120199]


The measures have helped to somewhat contain a rise in the
real, but it is up more than 5 percent against the dollar since
late June.

Brazilian officials worry a failure to achieve a global
solution to the currency imbalances problems will lead to more
unilateral restrictions on capital inflows and eventually to
commercial restrictions.

“We risk having a trade war, and that’s the worry,” Mantega
said earlier this month.

(Reporting by Ana Nicolaci da Costa; Editing by Padraic

Brazil wants IMF-led FX manipulation index-report