Brazil urges urgent reform of global financial system

October 24th, 2008 - 1:27 pm ICT by IANS  

Brasilia, Oct 24 (DPA) Brazilian President Luiz Inacio Lula da Silva has called for “urgent” reform in international financial institutions as the ongoing credit crisis has put developing countries at risk.”The progress that our countries have made is at risk. The global financial crisis can affect developing countries in an unfair and particularly harsh way,” he said Thursday.

“The current crisis shows us that international financial institutions are in urgent need of reform,” Lula said at a lunch to honour Jordan’s visiting King Abdullah II.

A few weeks back Lula said the financial crisis would have a mild effect on Brazil, if any, because the South American giant’s economy was now better prepared to face upheavals than it was a decade earlier.

But Brazil has recently had to adopt several measures to combat the slump, including permitting state financial institutions to buy stakes in troubled private banks.

The Sao Paulo Stock Exchange - which was at its lowest level in more than two years - had to suspend its activities six times in the past three weeks because of very pronounced declines. The dollar appreciated by 12.52 percent against the Brazilian real between Monday and Wednesday.

On Thursday morning, the value of the dollar was at 2.50 real, but it subsequently fell after Brazil’s Central Bank said it would inject up to 50 billion dollars in markets to “mitigate” the effects of the ongoing financial crisis on the exchange rate.

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