Brazil denies economy is "vulnerable" to global turbulence

BRAZIL ECONOMY

Brazilian Finance Minister Guido Mantega on Tuesday rejected the suggestion in a recent U.S. Federal Reserve report that his country's economy is "vulnerable" to global turbulence and pointed to Brasilia's $376 billion in reserves. EFE/File
Brazilian Finance Minister Guido Mantega on Tuesday rejected the suggestion in a recent U.S. Federal Reserve report that his country's economy is "vulnerable" to global turbulence and pointed to Brasilia's $376 billion in reserves. EFE/File

— Brazil's finance minister on Tuesday rejected the suggestion in a recent report from the U.S. central bank that his country's economy is "vulnerable" to global turbulence and pointed to Brasilia's $376 billion in reserves.

"It is the fifth largest monetary reserve in the world, and countries that have larger reserves are in the best position," Guido Mantega told a press conference.

Last week the U.S. Federal Reserve issued a report citing Brazil, India, Indonesia, South Africa and Turkey as the emerging economies "most vulnerable" to the economic crisis and to the impact that the gradual reduction of the Fed's stimulus efforts could have.

"That's a mistake," Mantega said, since "the risks that countries face in times of volatility are a lack of credit and of liquidity," which is not the case with Brazil.

The minister also noted that only 7 percent of Brazil's foreign debt of $330 billion is short term, so the country has "very little" need for immediate financing.

He also said that the country remains among the first five magnets for foreign investment, which he estimates at around $70 million a year.

By the same token, Mantega denied that Brazil is in a situation of "exchangerate fragility" and said that the value of the real against the dollar remains at acceptable levels.