If Brazil’s government was trying to halt the steady advance of the real against other currencies with the 2 per cent tax on portfolio flows it imposed on Tuesday, many are sceptical it will succeed.
Brazil has shrugged off the global crisis and its domestic economy, where millions of people are becoming consumers for the first time, is powering back to strong growth. An immediate fall in stock prices and the currency sparked by Monday night’s announcement seems unlikely to be sustained.
