Reuters: US Dollar Report: UPDATE 1-Brazil's real at 'realistic' level - Treasury

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UPDATE 1-Brazil's real at 'realistic' level - Treasury Dec 11th 2012, 14:27 Tue Dec 11, 2012 9:27am EST * Brazil's stimulus measures part of "permanent" policy * Treasury secretary indicates exchange rate at good level for economy By Danielle Fonseca SAO PAULO, Dec 11 (Reuters) - Brazil will keep stimulating its economy next year but the government believes the exchange rate has already achieved a more "realistic" level to support domestic industry, Treasury Secretary Arno Augustin said on Tuesday. Augustin did not specify which stimulus measures he was referring to but said the government intends to take steps to boost growth on a "permanent" basis. President Dilma Rousseff's government has offered several tax breaks and credit incentives to spur investments and revive economic growth after a near-recession in the past year. Some of the measures, such as a tax reduction on automobiles, are due to expire at the end of this year. "Stimulus measures will continue this and next year, this is something permanent," Augustin said at an event organized by Bloomberg in Sao Paulo. The Brazilian government has also acted in the past few months to weaken the currency, in an attempt to stimulate exports. But the real is at a more "realistic" level now after being excessively strong in the past, Augustin added. The real has slipped about 10 percent since the beginning of the year after several market interventions by the central bank and a sharp cut in Brazil's base interest rate, the Selic. It traded at 2.0755 reais per U.S. dollar on Tuesday. Augustin reiterated that the government doesn't have a target for the exchange rate. He said the central bank's recent interventions were aimed at curbing undesired volatility. "There's no change to the currency strategy," he said. "The government aims to curb volatility in the exchange rate, and the central bank has been doing great work on that." Link this Share this Digg this Email Reprints

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