Guedes says that high dollar motivated by ‘hell noise’ favors investments

Minister Paulo Guedes (Economy) said this Thursday (18th) that the dollar is above the equilibrium level due to fights and political noise. He stated, however, that this scenario can favor investments in the country.

At an event promoted by the Ministry’s Economic Policy Secretariat, Guedes said that the country has more than R$ 500 billion in investments contracted for the coming years and that new arrangements are in progress.

The minister argued that, in the past, the dollar was artificially devalued in the country, which created a risk to foreign investments. This is because, for him, there was a chance of the exchange rate returning to equilibrium, generating losses for long-term investors.

“Now the dollar has gone up there because of this political noise, uncertainty, fight, confusion. The economic fundamentals are solid, there are the fiscal triggers, the regulatory frameworks, the independent BC (Central Bank), the falling deficit”, he said.

“The fundamentals are there and the dollar is still up there because of the infernal noise. No problem, whoever enters now [para investir no país] has an additional gain margin. In addition to what it will gain from the project itself, it is coming in with a favorable dollar, which is above the equilibrium rate,” he added.

In the presentation, the minister defended the autonomy of the Central Bank and stressed that for the first time a government will run for reelection under the rules of formal independence from the monetary authority.

Guedes then accused previous governments of benefiting from interference made over the BC.

“The Central Bank helped to reelect FHC (Fernando Henrique Cardoso), cost US$ 50 billion, US$ 60 billion, and soon after the election it released the exchange rate, let it float. […] Dilma was also helped in the re-election by a BC who was running behind the curve the entire time,” he said.