Brazil well prepared to cope with U.S. rate rise, minister says
- 9 years ago
Brazil is well prepared to cope with any market volatility resulting from a U.S. interest rate rise, Finance Minister Joaquim Levy said on Monday.
Levy told a meeting in Madrid that Brazil's banks were well capitalized and it has large foreign exchange reserves.
"That reassures us that even if there starts to be volatility after U.S. interest rate adjustments begin - and there will be volatility, because today the market is less well oiled and we don't do the work we used to do to absorb shocks - in Brazil we are well prepared to confront this first period of volatility," Levy said.
Many emerging market economies are concerned that a Fed rate rise would trigger large outflows of capital from emerging economies into dollar-denominated assets, creating market turmoil that would hurt growth.
Levy told a meeting in Madrid that Brazil's banks were well capitalized and it has large foreign exchange reserves.
"That reassures us that even if there starts to be volatility after U.S. interest rate adjustments begin - and there will be volatility, because today the market is less well oiled and we don't do the work we used to do to absorb shocks - in Brazil we are well prepared to confront this first period of volatility," Levy said.
Many emerging market economies are concerned that a Fed rate rise would trigger large outflows of capital from emerging economies into dollar-denominated assets, creating market turmoil that would hurt growth.