Weekly Report - 17 May 2007

BRAZIL | Real gains strength. The Real closed at R$1.98 to the US dollar in the domestic currency exchange market on 15 May. This is the lowest exchange rate since February 2001. The Brazilian central bank has been buying dollars in the domestic market since the beginning of the year to hold the exchange rate but to no avail. The government seems adamant now that the central bank should not intervene again and promised to take other measures to compensate the export sector, such as raising import taxes and cheaper credit for certain industries to boost their productivity and competitiveness.