Brazil’s Finance Minister Guido Mantega hinted on July 5th that new regulatory measures are in store for his country’s expanding forex futures and derivatives market. “The government will continue to take measures to contain the over-valuation of the exchange rate…We’ve taken measures on reserve requirements, we can take measures on derivatives and futures. But these are not measures we will pre-announce,” he told reporters at a conference in London.
The Brazilian Real has been a favorite with forex investors since safe-haven currencies like the dollar and the euro faced crisis after crisis in the wake of the 2008 economic crash. Even though the central bank has imposed tighter credit limits on local bank positions, it is unlikely to reduce the number of forex investors in Brazil in the long-term.
Reuters reports that, according to an unnamed source on the government’s economic team, Brazil may be increasing taxes on dollar-futures contracts and other forex derivatives used in dollar-real exchange trading.