Brazil Exchange Rates - Brazilian Currency

Brazil Economy Overview

Possessing large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets.

The maintenance of large current account deficits via capital account surpluses became problematic as investors became more risk averse to emerging markets as a consequence of the Asian financial crisis in 1997 and the Russian bond default in August 1998. After crafting a fiscal adjustment program and pledging progress on structural reform, Brazil received a $41.5 billion IMF-led international support program in November 1998. In January 1999, the Brazilian Central Bank announced that the real would no longer be pegged to the US dollar.

The consequent devaluation helped moderate the downturn in economic growth in 1999, and the country posted moderate GDP growth in 2000. Economic growth slowed considerably in 2001-03 - to less than 2% - because of a slowdown in major markets and the hiking of interest rates by the Central Bank to combat inflationary pressures. New president DA SILVA, who took office 1 January 2003, has given priority to reforming the complex tax code, trimming the overblown civil service pension system, and continuing the fight against inflation.