Financial Times FT.com

Brazil sets 2% tax on capital inflows

By Jonathan Wheatley in São Paulo

Published: October 20 2009 01:28 | Last updated: October 20 2009 01:28

Brazil has imposed a 2 per cent tax effective from Tuesday on money entering the country to invest in equities and fixed income instruments. Direct investment in the productive economy will not be affected.

The move, announced shortly before local markets closed on Monday evening, is designed to slow the appreciation of Brazil’s currency, the real, which has gained 36 per cent against the US dollar this year.

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