Brazil's government is working on a broad overhaul of the country's currency laws following a strong runup of the nation's currency this year, the president of the central bank said in an interview published on Saturday.
Henrique Meirelles told the O Estado de S. Paulo newspaper that the change was necessary because Brazil built up its currency legislation on the assumption that hard currency would permanently be scarce.
The real (BRBY) has led gains against the dollar among the most-widely traded global currencies and is up 31 percent this year, according to Thomson Reuters data. The government this month imposed a tax of 2 percent on foreign purchases of stocks and bonds to discourage inflows.
Brazil's currency code dates from the 1930s and makes it harder for citizens and companies to sell excess dollars, Meirelles told Estado.
Changes to currency law could be accompanied by policy measures by the securities industry regulator CVM, the National Monetary Council or the bank itself, Meirelles added.
A strong real makes Brazilian exports more expensive and boosts the cost of debt-servicing for the government. The government is worried about both problems, Meirelles said.
There is, yes, a preoccupation with the exchange rate in the sense that (its current level) may spark some pricing distortions in the economy, he said.
The currency shed 1.4 percent on Friday to 1.756 reals to the dollar.
(Reporting by Guillermo Parra-Bernal, editing by Alan Elsner)