UPDATE 1-Brazil to raise currency worries during China trip

* Brazil’s Rousseff to discuss currency, trade with China

* Brazil worried about exchange rate effect on exports

* Gov’t will not stay “passive” as real firms-minister
(Recasts, adds currency, context, background)

BRASILIA, Jan 3 (BestGrowthStock) – Brazil’s newly-minted President
Dilma Rousseff will raise concerns about foreign exchange rates
and trade protectionism when she visits China in April, the
country’s trade and industry minister said on Monday.

Raising currency and protectionism questions with the Asian
giant “will be a priority,” Minister Fernando Pimentel told
reporters on Monday.

“This is a subject that speaks not just to Brazil but to
all emerging markets,” he added.

Rousseff, who took office on Jan. 1, is expected to travel
to several countries this year, including the United States.
The China trip will include a summit of the so-called BRIC
emerging market powerhouses, which also include Russia and
India.

Brazil’s real (BRBY: ) firmed 4.6 percent against the dollar
in 2010, on top of a 34 percent surge in 2009. Those gains have
made Brazilian exports more expensive abroad and the government
has responded with a range of measures, including currency
market interventions and capital inflows taxes to brake the
real’s gains.

The government also plans to move forward with the creation
of a lender to help finance exports, previously announced in
May.

In contrast, China has come under fire for what many
countries call its undervalued currency, which some say has
helped boost the country’s exports at the expense of other
nations.

“An exchange rate at this level harms domestic production.
And so we need to be careful to find paths without changing the
floating exchange rate model we’ve adopted,” Pimentel said.

“The government will not stay passive” as the currency
strengthens and hurts industry, he added.

Sources close to Rousseff told Reuters last week that her
government plans aggressive measures including targeted tariff
increases and tax breaks to help ease the exchange rate’s
effect on manufacturers. [ID:nN30113578]
(Reporting by Raymond Colitt and Jeferson Ribeiro; Writing by
Luciana Lopez; Editing by Andrew Hay)

UPDATE 1-Brazil to raise currency worries during China trip