Commodity OnlineMUMBAI: Among the BRIC (Brazil, Russia, India, China) nations, which currency would you love to hold? Experts these days say it is the Brazilian Real which is going to be the real currency.
Here is a report on the Reuters. “Brazil's currency, the real BRBY, followed the Bovespa (Brazilian stock index) higher, firmed 0.38 percent to 1.564 per U.S. dollar. The real has gained 13.6 percent so far this year, adding to a 20 percent surge in 2007 and leaving it at its strongest level since January 1999.”
In the last 10 years Brazil has gone from being a debtor nation to a creditor nation. Commodities boom has been kind to Brazil over the last decade and, to put icing on the cake, Brazil just struck it rich in oil. The discovery of a new oil field, perhaps the biggest oil find in the Western hemisphere.
Since then the Jobs scene is buoyant and inflation is on the rise. What next? Rates will be hiked to contain inflation. Investment in Brazilian Real makes sense.
When both inflation and unemployment rise in tandem the economy is trouble. But a buoyant employment scene and rising inflation help the currency strengthen because the Central bank has to raise rates to fight inflation.
