Brazil’s government urges calm amid financial collapse

October 7th, 2008 - 1:37 pm ICT by IANS  

Brasilia, Oct 7 (IANS) Brazil has urged calm in the wake of the global market mayhem that saw the country’s main bourse suffering its biggest collapse till date, and assured that the economy is capable of tackling the crisis, EFE reported Tuesday.Finance Minister Guido Mantega told reporters Monday “the country is solid, its banks are solid and its businesses are solid”.

Mantega said the worldwide credit squeeze was in its “most acute moment” but called it a “transient situation”, without indicating when he expected it to end.

Mantega issued a joint statement with the president of the Central Bank, Henrique Meirellas, amid the biggest collapse till date in the Sao Paulo stock market, which was down nearly 15 percent at one point Monday despite two trading halts to prevent the damage going worse.

The Brazilian currency accompanied the slide and depreciated by more than 7 percent, trading at 2.20 reais to the dollar.

Meirelles said Brazil has more than $200 billion in international reserves and guaranteed that the central bank will intervene in the currency market as necessary.

He acknowledged that given the dimensions of the crisis and its crushing impact on the markets, raw material exporters such as Brazil have no way to stop the depreciation of their currencies.

Mantega said that the government is preparing “to use in an intelligent manner the international reserves, which in part will be used to finance the exports of Brazilian companies, suffering from the restriction on credit”.

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