Aug. 24 (Bloomberg) -- Any withdrawal of stimulus by the Federal Reserve should be positive for Brazil because it would show the U.S. economy is recovering, said Luiz Awazu Pereira, deputy governor of Brazil’s central bank.
“For us, the exit from unconventional monetary policy was perhaps a long-awaited, predictable process,” Awazu told the of Kansas City Fed’s annual symposium in Jackson Hole, Wyoming. “The puzzle is why is it, with all this careful preparation, things got a little bit out of hand.”
The Brazilian central bank this week sought to stem the world’s worst currency decline, announcing a $60 billion intervention program involving swaps and loans to prop up the currency, the real, after it fell to a four-year low. Emerging markets such as Brazil have been pressured in recent weeks as Fed officials consider when to start reducing their $85 billion- a-month asset-buying program.
Brazil provided liquidity and created currency swaps so that investors understand “there’s going to be available forex for them to pay their bills,” said Awazu, the monetary authority’s director for international affairs.
“The process of exit is a welcome transition to more normal global monetary policy conditions,” he said.
--Editors: James Tyson,