Brazil May Ask WTO About Action on Weak FX Rates, Official Says

By Bloomberg News

Brazil, which saw imports from China surge 61 percent last year, may ask the World Trade Organization to look into what action can be taken against countries that weaken their currencies, a Finance Ministry official said.

Carlos Marcio Cozendey, the ministry’s international affairs secretary, said the government hasn’t decided whether to consult the Geneva-based WTO and that it’s too early to say if global trade rules apply to currency policies. He said he wasn’t referring to any specific country or currency.

Capital Controls Roil Latin America Bond Markets by Evoking ‘80s

By Bloomberg News

Latin American nations from Brazil to Peru are returning to currency and foreign investment controls that marked the 1980s era of hyperinflation.

Since the start of the year, policy makers across the region have increased dollar purchases to record levels, raised reserve requirements and curbed banks’ ability to bet against the dollar in a bid to stem a 29 percent rally in Latin American currencies since March 2009. Controls may stiffen, and other nations could join the “market-unfriendly” drive, said Alberto Ramos, an economist at Goldman Sachs Group Inc.