Brazil’s Meirelles: Fed’s latest move on G20 agenda

* Fed’s QE policy causing ‘distortions’ and ‘problems’

* Says issue on G20 agenda of country’s new leader

* Confident Rousseff’s ‘choices will be good ones’

* Says his bank assessing steps to stem flows of hot money

CHICAGO, Nov 4 (BestGrowthStock) – The head of Brazil’s central
bank said on Thursday that the U.S. Federal Reserve’s latest
plan to lower domestic borrowing costs and jumpstart the ailing
economy would cause further “distortions” in world markets and
complicate his country’s efforts to stem the rise of its
currency.

Speaking to reporters after an event at the University of
Chicago’s Booth School of Business, Henrique Meirelles said the
Fed’s effort to drive interest rates lower through a policy of
quantitative easing — or “QE” for short — was having
“negative consequences for other countries,” including his
own.

He said the issue would be on the agenda at the upcoming
G20 meeting in Seoul, the first for the country’s new
president-elect, Dilma Rousseff.

“QE creates excessive liquidity that flows over to
countries like Brazil,” Meirelles said. “Definitely, for Brazil
it does create a problem and Brazil will present proposals in
that regard to several countries — the U.S. and China — to
reach a different agreement not to generate so many
distortions.”

The Fed’s controversial plan involves buying as much as
$600 billion in government bonds and is widely expected to
weigh on the value of the U.S. dollar.

That’s likely to be bad news for Brazil, which is already
struggling to find ways to slow a recent deluge of foreign cash
into the country, which is boosting an already overvalued real
and hurting exporters.

Asked if Brazil’s central bank was contemplating additional
measures to manage the risk arising from the flow of hot money
into his country, Meirelles said: “No. We are only evaluating
what has been done so far.”

Asked if he expected Rousseff, the left-leaning winner of
Sunday’s presidential election, to ask him to remain at the
helm of the central bank once she takes power, Meirelles said:
“There is no expectation … In the right moment, she will make
all the decisions and will communicate them.”

He added, however, that he was confident the “choices will
be good ones.”
(Reporting by James B. Kelleher; Editing by Gary Hill)

Brazil’s Meirelles: Fed’s latest move on G20 agenda