* Economic team more worried about investment than inflation
* Government will not allow real to return to 2012 highs
By Luciana Otoni
BRASILIA, Jan 29 Brazilian policymakers have
allowed the real to strengthen past the 2-per-dollar mark as
part of a strategy to cheapen imported capital goods and boost
much-needed investment in industry, a source at the Finance
Ministry said on Tuesday.
A second source on President Dilma Rousseff's economic team
stressed that the government will not allow the currency to
appreciate too rapidly against the dollar nor to return to
levels seen early last year, when the real at 1.7 per dollar
posed a threat to Brazilian exporters.
Both sources spoke on condition of anonymity.
The Finance Ministry source downplayed the impact of the
strengthening currency on inflation.
"This change in the exchange rate has little impact on
inflation, but helps boost imports of capital goods," the source
said, adding that the Finance Ministry sees inflationary
pressures easing later in the year after a more difficult first
The real on Tuesday rallied past the
2-per-dollar level for the first time since July 2; that
threshold for nearly seven months had been considered a boundary
of a trading band informally set by policymakers.
Analysts saw the move as a sign that inflation concerns are
starting to trample a government goal to stimulate exports,
despite a November pledge by Finance Minister Guido Mantega that
a real weaker than 2 per dollar "was here to stay."
But Rousseff's economic team has become increasingly worried
about a lack of investment, which has been choking Brazil's
In minutes of its latest monetary policy meeting, the
central bank said Brazil's economic recovery is mostly
constrained by supply bottlenecks that cannot be solved by
lowering interest rates.