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Weak Dollar Hurting Brazil's Small Businesses |
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Written by Taís Leitão
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Monday, 28 November 2005 |
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Brazil's Minister of Development, Industry and Foreign Trade, Luiz Fernando Furlan, says that although the export sector has been strong during the three years of the Luiz Inácio Lula da Silva presidency, many small businesses will have difficulties with the continued valorization of the real against the dollar.
"Big businesses have slack they can take up. They can withstand losses and make up for them in the future. Small businesses do not have that flexibility and it will be difficult for them to continue selling abroad," said the Minister.
Furlan cited the footwear sector as an example where it is reported that Brazil was unable to export three million pairs of shoes in September and four million in October.
Furlan said he was concerned that the country was once again fooling itself with an unreal exchange rate. "Analyses of the situation show that the current exchange rate (US$1=R$2.24) is going to cripple an important number of exporters in the medium term," said the Minister, adding that Central Bank buying of dollars was not sufficient to resolve the problem.
Furlan concluded by saying that this year's export target is US$ 120 billion. He said that although exports would not fall, "our export growth rate will certainly be affected by the exchange rate and will rise slower than before."
Agência Brasil
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The US$ is NOT WEAK.
It is the Reais that is the strongest currency in the world this year !
The US$ is strong against most major currrencies.
The strength in your currency is due to your very high interest rates, decided by your Central Bank and government that defends the CB.
Everyone knows this, except your Minister who should be the first to know. How was he named Minister of Industry and Foreign Trade ????