WRAPUP 1-Brazil seeks no bond tax hikes; to boost reserves

Fri May 29, 2009 9:29pm BST
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* Top economic officials say no taxes planned on bonds

* Central bank chief says to keep boosting forex reserves

* Finance minister seeks more bond purchases by foreigners

By Cesar Bianconi

SAO PAULO, May 29 (Reuters) - Brazil's top two economic officials said on Friday there was no need to reinstate a tax on foreigners' bond holdings to stem dollar inflows that have pushed the country's currency to its biggest monthly gain in 6 years.

Brazilian business daily Valor Economico reported on Friday the government was considering restoring a 1.5 percent financial transactions tax on purchases by overseas investors of certain fixed-income products, mainly government debt.

The IOF tax was scrapped in October at the height of the turmoil in global financial markets as dollar inflows sank.

"The finance ministry is not contemplating changing the IOF at this time, particularly for government bonds," Finance Minister Guido Mantega said.

"We want ... (more) purchases of government bonds, particularly by foreigners. There is no interest in curtailing those inflows," he said in a statement.  Continued...

 

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