Brazilian Economy Minister Paulo Guedes said on Monday that Brazil’s economy was starting to recover and he was not worried about exchange rate fluctuations that saw the real close the day at its weakest ever against the U.S. dollar, Trend reports citing Reuters.
“We have a floating currency, so it floats,” Guedes told reporters in Washington, adding that the currency dips against the dollar when interest rates drop. The real closed on Monday at 4.215 reais to the dollar. BRBY
Guedes, who is due to meet with U.S. Treasury Secretary Steven Mnuchin on Tuesday, also said there was no reason for concern about the Brazilian government’s current account deficit, which has grown to 3% of gross domestic product, its widest since 2015.
Guedes met on Monday with Commerce Secretary Wilbur Ross, who he said reaffirmed the U.S. commitment to backing Brazil’s bid to joining the Organization for Economic Co-operation and Development (OECD) after Argentina.
But if Argentina’s bid for OECD membership failed to win approval, Brazil would be next in line to join, Guedes said.
Guedes, a University of Chicago-trained free-market economist, said Washington admired the policies that Brazil had adopted.
As economic policy chief under right-wing President Jair Bolsonaro, Guedes has sought to reduce Brazil’s huge budget gap by overhauling the country’s costly pension system, curbing public spending and planning to sell off state companies.
The government by year-end will send its tax change proposals to Congress, which will seek to reduce income tax on corporations, Guedes said.
Guedes attended a forum of chief executives of U.S. and Brazilian companies, the first meeting of the group since 2015.
He said 5G technology, the Boeing Co (BA.N) acquisition of the civilian wing of Brazilian planemaker Embraer and launches from Brazil’s Alcantara spaceport were discussed, although not Brazilian beef exports to the United States.
Earlier on Monday, Brazil’s government said Brazilian executives would soon be included in the U.S. Global Entry Program that allows expedited clearance for pre-approved, low-risk frequent travelers to the United States.