Brazilian Finance Minister Guido Mantega said in no uncertain terms Monday that the current crisis in world markets is "perhaps the worst since 1929," as he announced new measures adopted by President Luiz Inacio Lula da Silva's government to increase access to loans for exporters, dpa reported.
"Brazil is not immune to the crisis, but this affects the countries with problems in their banks more, and countries like Brazil less," Mantega said.
Also Monday, the Sao Paulo stock exchange - the largest in Latin America - had to suspend trading twice and fell by over 15 per cent before settling with a drop of some 13 per cent.
"We have no solvency problems, we are only suffering a liquidity problem as a result of that reduction in international credit. The government is taking the appropriate measures to ensure that liquidity keeps flowing," Mantega said.
In a joint statement to the media Monday in Brasilia, Mantega and Brazilian Central Bank President Henrique Meirelles said they will use some of the country's foreign exchange reserves - currently amounting to move than 206 billion dollars - to provide credit lines for export until the "most acute stage" of the crisis is over.
"We are using the reserves intelligently, to keep their level and at the same time give liquidity to the market," Mantega said.
He said the plunge in the Sao Paulo stock exchange and the appreciation of the dollar against the Brazilian real are by-products of the larger phenomenon.
"There is a loss of confidence in financial institutions, which is reflected all around the world and also in Brazil. I think that situation is temporary. We are, in my opinion, in the most acute moment of that crisis," he said.
"It is hard to imagine that the world financial system remains stagnant, as it is today," Mantega noted.
Like Lula did in recent days, the minister called upon the leaders of the countries that are at the core of the crisis to adopt measures to restore confidence in their financial institutions.
"All governments have to adopt strong action, and that way I think we will get out of this acute stage, although I think the crisis will persist, because it is very strong, perhaps the worst since 1929," Mantega said.