Brazil’s Bank Unlikely to Sell Dollars, Mantega Tells Estado

Brazil’s central bank is unlikely to sell dollars in the spot market to stem declines of the real, Finance Minister Guido Mantega told O Estado de S. Paulo.

“I don’t think the central bank will do that,” Mantega said when asked by the Sao Paulo-based newspaper whether the bank would sell dollars in the foreign exchange market. “I’m satisfied,” he said in the interview, referring to the current level of the exchange rate close to 2 reais per U.S. dollar.

Mantega played down any inflationary pressure that the weakening real could cause by increasing the cost of imported goods. “It causes a little bit of concern but increasingly less,” Mantega said.

Brazil’s economy may not grow 4.5 percent this year as the government had previously forecast, Mantega told the newspaper. The expansion will be greater than the 2.7 percent registered in 2011, he told Estado. Brazil’s government may cut payroll taxes for additional industries to boost growth, he added.

To contact the reporter on this story: Telma Marotto in Sao Paulo at tmarotto1@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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