SAO PAULO, March 8 The Brazilian real sank to a
session low on Wednesday on speculation that the government
could raise taxes on foreign exchange transactions to deliver on
this year's fiscal target.
Bloomberg News reported the move is "among the options being
considered" by the Brazilian government, citing a source with
direct knowledge of the issue.
A spokeswoman for the Finance Ministry declined to comment
immediately on the report.
The currency weakened as much as 1.9 percent to
3.1806 per U.S. dollar after the report before paring losses to
around 1.2 percent.
Finance Minister Henrique Meirelles had said on Tuesday that
Brazil could raise taxes or promote fresh spending cuts if
necessary. He added there was no possibility of revising the
143.1 billion reais ($45.3 billion) primary deficit goal, which
excludes interest payments.
Brazil last raised the so-called IOF financial tax on the
purchase of foreign currencies in cash in May to 1.1 percent.
($1 = 3.1579 reais)
(Reporting by Bruno Federowski)