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Brazil Tries to Show the Positive Side of a Weak Dollar |
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Written by Alana Gandra
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Monday, 04 July 2005 |
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The executive secretary of Brazil's Ministry of Development, Industry, and Foreign Trade, Márcio Fortes de Almeida, told a gathering of the American Chamber of Commerce of Rio de Janeiro that the exchange rate of 2.35 reais for the dollar does not represent "something as bad" as some exporters claim.
He explained that exporters can offset their losses by purchasing cheaper inputs, which will add value to their products.
This is known as the "drawback" system, a fiscal benefit for imports when they are intended for future exportation.
"Around US$ 30 billion of Brazil's total imports nowadays are for 'drawback.' They are inputs you acquire, add value, and direct abroad in the final product."
According to Fortes, this provides exporters with market gains. "They end up exporting more, indirectly. It's a type of export 'hedge,' (protection)," he explained.
ABr - www.radiobras.gov.br
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