“The global currency war could get even worse if Europe joins the fray, says the man widely credited with coining the term.
Brazilian Finance Minister Guido Mantega told Reuters European countries should focus on reviving their economies with more investments, rather than trying to weaken the euro to protects jobs as France has suggested ahead of next week’s meeting of G-20 economic powers.
“We will continue to have this currency problem unless the global economy takes off,” Mantega said in an interview. “The solution here is to make their economies more dynamic and jolt them out of stagnation.”
More than two years ago Mantega used the term “currency wars” to describe the series of competitive devaluations adopted by rich nations to bolster their exports amid the global slowdown to the detriment of emerging market nations.
Since then Brazil has actively sought to depreciate its currency, the real, to protect local manufacturers of everything from shoes to suits and make its exports more competitive. It has taken bold action to curb speculative capital inflows with higher taxes.
Mantega said that approach was not right for everyone — especially for heavily industrialized nations….”
If you enjoy the content at iBankCoin, please follow us on Twitter
