* Weaker real ideal to support economy without stoking
* Recent currency losses were not justified by fundamentals
By Patricia Duarte
SAO PAULO, Dec 11 Brazil's currency, the real,
was at a satisfactory level when it traded around 2.03 and 2.04
reais per dollar, a member of the government's economic team
Those levels, where the real traded during much
of the period between July and November, are seen by a large
part of Brazil's economic team as adequate to support exports
and investments, without stoking inflation.
"We were satisfied with 2.03 to 2.04 reais," the source said
on condition of anonymity, adding however that it is natural for
the currency to weaken at year-end, when demand for dollars
usually grows as foreign companies repatriate profits.
On Monday, central bank's monetary policy director Aldo
Mendes said the real remained weaker than the level projected by
a central bank model.
The real was around 2.08 per dollar when Mendes made his
remarks. It closed at 2.077 per dollar on Tuesday, and analysts
say it is likely to stabilize around that area after the
government made it clear last week it does not want a real
weaker than 2.1 per dollar.
That message became obvious after a series of government
actions last week, including central bank interventions in the
FX market and measures to facilitate dollar inflows, boosted the
real from a 3-1/2-year low of nearly 2.13 per dollar.
The source argued that the actions were needed because there
was "no change in economic fundamentals" to justify the real's
"There was nothing but noise to change the currency's
level," the source said.
The real weakened sharply at the end of November after
Brazilian government officials, including Finance Minister Guido
Mantega, suggested a weaker currency was needed to boost
Losses increased on Nov. 30 after data showed the Brazilian
economy grew at only half the pace forecast by economists in the
third quarter, adding to bets on a weaker real.