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Friday, February 09, 2007

Biotech and Dollar Purchases

Ok, to me it looks rather like Brazil is about to start rocking and rolling. Two stories in today from Bloomberg seem interesting:

Brazil to Invest 10 Billion Reais in Biotechnology

Brazil plans to invest 10 billion reais ($4.77 billion) in biotechnology over the next decade to fuel growth in agriculture, pharmaceuticals and other industries.

Brazilian President Luiz Inacio Lula da Silva signed a decree today creating the program to invest 1 billion reais annually for 10 years. Lula also called on companies to match the government's investments.

The cash will be used to fund research and development of a new strain of sugarcane that is resistant to droughts, a vaccine for rabies and other projects. By stepping up biotechnology funding, Brazil, the world's biggest grower of sugarcane, oranges and coffee and home to 20 percent of the planet's living species, aims to meet rising demand for its crops and reduce its dependence on foreign pharmaceutical makers such as Pfizer Inc.

``Brazil has strengths that put us in a position to stand out in these new technologies,'' said Lula, 61, during a ceremony today at the presidential palace in Brasilia. ``This policy will help Brazil realize this potential.''

Brazil Real Falls as Central Bank Steps Up Dollar Purchases

Brazil's real fell for a second day on speculation the central bank is stepping up its efforts to halt the currency's rally by buying more dollars and planning sales of reverse currency swap contracts.

Central bankers have bought dollars since July to help exporters whose profit margins have been eroded by the real's four-year, 71 percent rally. Reverse currency swaps allow investors to hedge against a weaker dollar by locking in a fixed exchange rate to sell the U.S. currency in the future.

``The bank will probably act more aggressively now,'' said Jorge Knauer, manager of foreign exchange at Banco Prosper in Rio de Janeiro. ``There could be a sale of reverse currency swaps very soon in addition to heavier dollar purchases.''

1 comment:

Anonymous said...

Great article

I hope everybody read this article