* BRICS want joint action against strong dollar -Brazil
* Brazil, China leaders discussed "complex" markets
* Rousseff to speak to other BRICS' leaders this week
* BRICS to propose coordination at meeting in July
By Alonso Soto
BRASILIA, June 24 Major emerging-market nations
will work together to limit the effects that a strong U.S.
dollar could have on their economies as the Federal Reserve
signals plans to scale back its massive stimulus program, the
Brazilian government said on Monday.
Brazilian President Dilma Rousseff and her Chinese
counterpart, Xi Jinping, discussed ways to strengthen policy
coordination on Monday in a telephone conversation, said Thomas
Traumann, spokesman for the Brazilian government.
Rousseff will contact other leaders of the BRICS group,
which include Russia, India and South Africa, later this week to
discuss concrete measures.
"The BRICS will decide on coordinated action related to the
global appreciation of the U.S. dollar at a meeting in July in
Russia," Traumann said without elaborating.
Brazil and other developing nations - until recently the
main engines of the global economy - are growing anxious about
the expected withdrawal of stimulus in the United States, which
has sparked a sell-off in local markets.
In his conversation with Rousseff, China's Xi stressed that
"new and complex" developments in the global markets called for
closer coordination among the BRICS, a Brazil-based diplomat
"There is a consensus that the BRICS need to strengthen
communication and coordination at a time when we have more
complex and new factors affecting global markets," said the
official, who was briefed on the presidents' discussion.
The official, who asked for anonymity, gave no specifics.
Expectations that the U.S. Federal Reserve will scale back
its bond-buying program has dragged the Brazilian real
to four-year lows, prompting the government to remove
capital controls in a bid to bring more dollars into the
economy. Brazilian stocks have also plummeted to more than
The sharp depreciation of the real has raised worries about
the risk to local companies with large debt in U.S. dollars. A
weaker currency could also stoke already-high inflation in
Brazil by raising the value of imported goods.
Only a few months ago, Brazil and other emerging market
economies blamed the ultra-loose monetary policy of developed
nations for pushing up the value of their currencies and making
their exports less competitive.
The specter of less stimulus has curbed the capital inflows
to countries like Brazil, deteriorating their external accounts
and pushing down the price of crucial commodity exports.
Emerging market nations at the G20 have called for the
United States to be clearer in its policy communication with
markets to avoid more volatility, a Brazilian official said.
"Emerging-market nations are concerned about the fallout of
the stimulus withdrawal," said the official, who also asked for
anonymity. "But this time around we have more reserves and tools
to tackle the problem."
During the 2008-2009 global financial crisis, central banks
from several major economies agreed to carry out currency swap
agreements among themselves to bolster liquidity.
In March, Brazil and China agreed to set up a currency swap
line that allowed them to trade the equivalent of up to $30
billion per year in their own currencies. The swap is meant to
help businesses in both countries weather currency