The central bank of Brazil takes action

By Emerging Money>,

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Emerging market currencies have been beaten up of late with the Brazilian real ( BZF , quote ) being one the hardest hit forcing the central bank of Brazil ( EWZ , quote ) to take action. Brazil_100_reais Yesterday the central bank said they will be intervening on behalf of their currency by providing at least 60 billion in liquidity from now to the end of the year.

The central bank will provide stimulus by offering $3 billion in loans and swaps per week starting today and it will continue through end of the year.

It's not all that of a surprise with Brazil's long battle with inflation and a currency that has dropped to lowest level since the 2008 global crisis on President Dilma Rousseff watch that is heading into an election year.

Bottom Line: Brazil and other emerging market currencies are facing headwinds as the U.S. Federal Reserve readies its tapering plan sending the U.S. dollar higher.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
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