RIO DE JANEIRO, June 18 (Xinhua) -- Brazil's Finance Minister Eduardo Guardia said Monday that the Brazilian government has instruments in response to the volatility of the financial markets.
"We have powerful instruments to act in moments of high volatility," said Guardia during an event held in Sao Paulo.
Citing a global appreciation of the U.S. dollar, he said: "We will act if there is a variation on the prices of the fundamental assets of the economy."
The Brazilian currency real is one of the currencies which has seen most variations in the last few weeks.
Last Thursday, the real depreciated 2.64 percent against the dollar, the steepest fall in a day in more than a year while on Friday it increased in value by 2.15 percent after the central bank intervened.
On Monday, the real ceded 0.27 percent and ended the market session at a value of 3.74 reals to the dollar.
The real's variations have taken place since a truck drivers' strike paralyzed the country at the end of May. The strike led investors and the financial market to doubt the government's capacity to properly guide fiscal policies and introduce its reform agenda.
According to Guardia, Brazil has a low deficit in its external accounts as well as low levels of inflation and interest rate, which mark a difference with other emerging countries currently suffering the aftermath of the dollar's appreciation.
He admitted the South American country's economic growth this year would be less than an expected 3 percent, partly due to problems caused by the 11-day truck drivers' strike.
On Monday, the financial market reduced this year's projected growth to 1.76 percent.
Guardia refrained from saying whether the government will again reduce this year's projection.
