By Jonathan Wheatley
Published: September 2 2007 19:49 | Last updated: September 2 2007 19:49
Until a few years ago, if international credit markets felt a chill, Brazil was among the first to catch a cold. In the Mexican, Russian and Asian crises of the 1990s, the South American country was quick to follow its emerging market peers into turmoil. When it was forced to devalue its own currency in 1999, its assets took such a tumble that the central bank had to push its basic interest rate up to 45 per cent a year to stem a run on the real.
Today, Brazil is heavily insulated by high foreign reserves, low foreign debt and healthy current account surpluses. In spite of the recent problems on world credit markets, the talk now is merely of whether the pace of interest rate cuts may have to slow.
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