IMF-G20/BRAZIL Brazil's central bank chief says it is seeking greater reserve liquidity

Record ID: 135986

  • Title: IMF-G20/BRAZIL Brazil's central bank chief says it is seeking greater reserve liquidity
  • Date: 10th October 2015
  • Summary: LIMA, PERU (OCTOBER 09, 2015) (REUTERS) HEAD OF BRAZIL'S CENTRAL BANK, ALEXANDRE TOMBINI, AND TREASURY MINISTER, JOAQUIM LEVY, ARRIVING (SOUNDBITE) (Portuguese) HEAD OF BRAZIL'S CENTRAL BANK, ALEXANDRE TOMBINI, SAYING: "We're looking to prepare us with a cushion of liquid international reserves of 372 billion dollars. We have prudent regulatory system which is very tight.
  • Embargoed: 25th October 2015 12:00
  • Keywords:
  • Location: Peru
  • Country: Peru
  • Topics: General
  • Reuters ID: LVA7AFPDIA16LXWADEFYAI3H0BLG
  • Aspect Ratio: 16:9
  • Story Text: The head of Brazil's Central Bank, Alexandre Tombini, told media on Friday (October 09) that it is looking to boost international reserves so as to contain any pressure from deprecations in the real, following a period of volatility in Latin America's largest economy.
    Earlier this week, Tombini said the depreciation of the Brazilian real currency poses a challenge to conducting monetary policy, but warned policymakers not to overreact to abate short-term market movements.
    Announcing the measure, Tombini said Brazil had a prudent regulatory system.
    "We're looking to prepare us with a cushion of liquid international reserves of 372 billion dollars. We have prudent regulatory system which is very tight. Whatever position of open foreign exchange of the banks or of the financial system is protected in relation to this gap and we have the oversight of more than two years of private sector bonds which raised funds on the international market, taking advantage of the lower rates which were prevalent at the time," he said.
    Recently, Brazil's economy has taken a battering with jobs being shed and battles with currency and interest rates movements as it enters into recession.
    Tombini however played down concerns.
    "The Central Bank together recently with the Treasury Ministry left it very clear that a couple of weeks ago the actions of the Exchange and interest rates markets require us to reduce excess volatility in these markets and to ensure that these markets are functional, even in times of increased stress, which is not the case now but was the case a couple of weeks ago. In other words, what is functionality of the markets? That in moments of great financial stress, who are the buyers and sellers in the market, independent of price dynamics. In this sense, no instrument is outside the scope of the Central Bank, with the instruments of the Central Bank," he said.
    Tombini added that economic concerns have been exaggerated.
    "What we have seen is a reduction in volatility. In my opinion that was some a particular exaggeration. I don't like making statements about market movements but at the time this was an exaggerated movement, both in the currency market and in market interest rates," he said.
    Earlier in the day, President Dilma Rousseff said she believes the country's economy is still too closed to foreign trade and that her government is looking at ways to open it to other countries.
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