March 4, 2014
Paulo Sotero, 3/4/2014
The contrast between the Brazilian Foreign Ministry’s criticism of the crackdown on protesters in Kiev and the cautious statement released as protests spread in Venezuela was highlighted in commentary published in the Brazilian media last week that was critical of Dilma Rousseff’s timid foreign policy, in contrast to the active diplomacy during the Lula administration.
”The situation in Venezuela is different from Ukraine,” Rousseff said, defending her government’s posture. She noted that Venezuela has achieved important social gains in democracy for the poorest sectors of the population and that those gains should be preserved. Referring to the protests, the Brazilian president added that “Brazil supports freedom of expression,” stressing that “we believe, under any circumstance, that dialogue, consensus, and democracy building are better than any kind of institutional rupture.”
Most observers in Brazil, including those who oppose Brasília’s often accommodating attitude vis-à-vis the Bolivarian governments of South America, agree that the conflict in Venezuela is unlikely to lead to an outcome similar to the Ukrainian crisis, which resulted in a change of government. Even critics of chavismoview opposition leader Leopoldo López’s strategy of forcing a show down with President Nicolás Maduro as naive, dangerous, and potentially counterproductive. “Were it to succeed, it would likely lead to a military intervention and to less—not more—democracy in Venezuela,” says one analyst who follows events in Caracas closely and has no sympathy for either Maduro or Rousseff. This analyst, reflecting a broadly shared view in Brazil, said that the more measured approach of the governor of the state of Miranda, Henrique Capriles, who narrowly lost the presidential election to Maduro last year, is preferable. With the Venezuelan economy rapidly deteriorating and divisions emerging in the chavista camp, Capriles is betting on a recall election which, according the country’s constitution, can take place mid-way through Maduro’s term. Such an institutional path to regime change in Caracas would be widely supported in the region.
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March 7, 2014
Merco Press, 3/7/2014
“Our proposal is to stimulate trade in local currencies through central banks” said Alberto Alzueta, chairman of the chamber. “The Brazilian exporter sells in reales and the Argentine buyer pays with Pesos, this will automatically increase trade and reduce demand for dollars”.
Likewise Jose Francisco Marcondes, president of the Brazil-Venezuela Federation of Chambers supports the initiative: “it is absolutely positive and adequate to organize this kind of trade which cuts us lose from the US dollar which we don’t issue and from inflation”.
The comments follow reports from Brazil’s main financial daily Valor Económico which estimates Brazilian exports to Argentina and Venezuela this year can be expected to drop by at least 4 billion dollars.
March 7, 2014
Brazil recorded its largest February trade deficit ever, deepening a trade gap this year that underscores the uncompetitiveness of local industry and a voracious appetite for imports.
The commodities powerhouse posted a trade deficit of $2.125 billion in February, the trade ministry said on Thursday, its second straight monthly shortfall.
The deficit was below market expectations for a $3.05 billion gap, according to the median forecast of 20 analysts surveyed by Reuters. The country posted a deficit of $4.06 billion in January, its largest monthly trade gap ever.
March 7, 2014
Filipe Pacheco – Bloomberg, 3/7/2014
The real declined to a one-week low a day after Brazil posted a trade deficit and foreign-exchange outflows, reducing the currency’s allure.
The currency depreciated 0.2 percent to 2.3302 per U.S. dollar at 9:48 a.m. in Sao Paulo, the biggest decline among major currencies tracked by Bloomberg after the South African rand. The real pared its weekly advance to 0.7 percent. Swap rates on contracts due in January 2017 rose four basis points, or 0.04 percentage point, to 12.41 percent, extending their increase since Feb. 28 to 15 basis points.
“The market didn’t like the trade deficit and the outflow numbers from yesterday,” Jose Carlos Amado, a foreign-exchange trader at Renascenca DTVM in Sao Paulo, said in a phone interview. “That should weaken the currency. It should get back to a lower level, around 2.34 per dollar.”
March 6, 2014
Marvin G. Perez – Bloomberg, 3/5/2014
Coffee futures topped $2 a pound in a surge to a 24-month high as drought conditions that started in January eroded prospects for crops in Brazil, the world’s top producer and exporter.
Rain will ebb after a cold front this week in Brazil’s coffee areas, Somar Meteorologia inSao Paulo said yesterday. The southeast including Minas Gerais, the top producing state, is having the driest summer since 1972, the National Institute of Meteorology in Brasilia has said. Wolthers Douque, a U.S. import company, cut its crop forecast this year by 10 percent.
Futures for arabica beans, favored by specialty companies such as Starbucks Corp. (SBUX), have surged 83 percent this year, the most among the 24 raw materials tracked by the Standard & Poor’s GSCI Spot Index. Last year, coffee tumbled 23 percent in the third straight annual loss, the longest slump since 1993, amid Brazil’s bumper crops.
March 6, 2014
Filipe Pacheco – Bloomberg, 3/6/2014
Brazil’s swap rates climbed after the central bank said that it would be appropriate to keep adjustinginterest rates given persistent inflation.
Contracts due in January 2017 rose five basis points, or 0.05 percentage point, to 12.33 percent at 11:34 a.m. in Sao Paulo. The real advanced 0.5 percent to 2.3080 per dollar today, the strongest level on a closing basis since Dec. 10.
The central bank, which slowed the pace of interest-rate increases to 25 basis points last month after six straight half-point adjustments, said in minutes of the meeting published today that it considers “the continuation of the adjustment of monetary conditions under way” to be appropriate. Policy makers have raised borrowing costs 350 basis points since April to 10.75 percent. Consumer prices jumped 5.65 percent in the year through mid-February, above the bank’s 4.5 percent target.
“The minutes show there will be a change of 0.25 percentage point in the next meeting,” Solange Srour, the chief economist at ARX Investimentos in Rio de Janeiro, said in a phone interview. “It showed that there still are concerns regarding inflation.”
March 6, 2014
Paul Guzzo – The Tampa Tribune, 3/4/2014
From Tampa to the Senate floor in Washington, and throughout the United States, Cuban Americans who defend continued isolation of the Communist island nation are throwing their support behind Venezuelan Americans in their efforts to bring order to the South American country.
With 55 years of experience battling a socialist government, these Cuban Americans believe they have the knowhow Venezuelan Americans need to back an opposition party that has made waves in Venezuela since the launch of student protests blaming the government for poverty and corruption.
Foreign policy analysts, on the other hand, question whether any moves from U.S. soil can help. Instead, these voices say, the U.S. should step aside and urge mediation by an interested party closer to the turmoil — Brazil.
March 6, 2014
Matthew Malinwoski & Raymond Colitt – Bloomberg, 3/6/2014
Brazil’s central bank signaled today it will continue tightening monetary policy as above-target inflation remains persistent. Swap rates rose.
Policy makers led by bank President Alexandre Tombini voted unanimously on Feb. 26 to slow the pace of rate increases, raising the benchmark Selic rate to 10.75 percent from 10.5 percent after six straight half-point increases. The central bank’s monetary policy will help offset inflationary pressure from a currency depreciation, officials said in the minutes of their Feb. 25-26 meeting published online today.
The central bank considers “appropriate the continuation of the adjustment of monetary conditions under way,” according to the minutes. “Currency depreciation constitutes a source of inflationary pressure in the shorter term.”