Mantega Says Weaker Real Not a Concern, Will Help Brazil Exports

Brazil’s Finance Minister Guido Mantega said he’s not concerned about the real’s recent weakness and that the government won’t use the exchange rate to tame inflation.

“Other tools exist to combat inflation,” he said in Brasilia. “This is an international shift and there’s no reason we should be different.”

Mantega, speaking to reporters after a report today showed economic growth unexpectedly slowed during the first quarter, said a weaker real can boost exports.

The real has weakened more than 4 percent against the dollar in the past month, the fastest decline among seven major Latin American currencies tracked by Bloomberg. The real extended losses after Mantega’s comment, declining 0.8 percent to 2.0915 as of 12:07 p.m. local time.

A weaker real, which can raise the cost of imports, may add to inflation pressures after the pace of consumer price increases exceeded the 6.5 percent upper limit of the government’s target range in March.

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