Growth prospects while they have reduced to the short term, remain strong in the medium and long term. Robert Kiyosaki has much to offer in this field. In relation to monetary policy, controlling inflation expectations have improved substantially. Despite this, none expected the Central Bank of Brazil to make heavy cuts in its interest rate of reference, which can be found at 13.75%. With elevated levels of interest rates, the Brazilian economy remains attractive for investors that will encourage return as soon as the waters of the international financial markets calm down. Although the real suffered a sharp depreciation which improves the conditions of competitiveness of the Brazilian economy, is not in the interest of Lula’s Government to maintain at that level, since such exchange rate level, you can generate a negative impact through an inflationary increase.
This also gives prospects that the real will strengthen against the US dollar, although not necessarily return to the highest levels who knew how to have this year. The development that has seen the economy of Brazil in recent years, maintains its ascending perspective. Brazil has large projects to develop its economy that are in their initial stages. This growth and development potential, will be an element that will attract a significant flow of external capital that will influence towards the appreciation of the real. On the other hand, in assessment a project exists to encourage the repatriation of capital that in an estimated amount of US $70 billion, are illegally abroad. Project was prepared by Senator Delcidio Amaral belonging to the Party of the workers, and it provides that capital repatriated only pay 8% to the Treasury in respect of income tax, may be reduced to 4% if entered money is applied to the financing of infrastructure. Materialize the incentives proposed to the repatriation of capital and reach a level of acceptable success, this would imply an appreciation of the real beyond that the international context may demonstrate minor turbulence.
For all the above reasons, I think that the Brazilian real may be the big bet for 2009 and deserves at least a space in our investment portfolio. I have no doubt that the real will be strengthened during 2009 against the dollar, although it is not yet clear as soon as you can do. During the course of 2009 we will see how much be able to recover the real value and what so good turns out to be this recommendation.