Real Posts Monthly Drop as Tax Saps Bond Demand: Brazil Credit
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Brazil’s real is falling against all major currencies this month for the first time since January, a sign Finance Minister Guido Mantega’s tax increase on foreigners is succeeding in slowing investment in the debt market.
The real dropped at least 0.4 percent versus all 16 major currencies, including a 3.9 percent plunge against the yen, as Mantega raised a tax on foreigners’ fixed-income purchases twice to stem gains in Brazil’s currency. International investors pared bullish bets on the real by $4 billion last week, the most since June, according to data compiled by BM&FBovespa SA.