* Pimentel says real between 1.96 and 2.05/dlr is acceptable
* Brazil to give tax breaks to all sectors of economy
RIO DE JANEIRO Feb 8 Brazil's Development
Minister Fernando Pimentel joined the government chorus that
advocates an exchange rate around 2 reais per dollar to boost
investment without hurting the country's industry.
In an interview with Valor Economico newspaper published on
Friday, Pimentel said the government is "monitoring" the real
to ensure it floats around the mark of 2 per dollar, "without
falling or rising too much."
He went further to say that an acceptable range for the real
would be between 1.96 and 2.05 per dollar.
"We're not going to have an exchange rate that hurts our
industry, that we won't have anymore," he said. "But we also
won't feed the illusion of an excessively devalued currency,
where everybody thinks we suddenly recovered our
The real weakened about 30 percent versus the
U.S. dollar between July and November, when it touched a
3-1/2-year low of 2.13 per dollar, but it has been strenthening
It closed Thursday at 1.9705 per greenback as investors
believe policymakers now favor a stronger currency to help fight
inflation, which has neared the ceiling of a government target.
An exchange rate around 2 reais per dollar was also
considered as acceptable by Finance Minister Guido Mantega. In
an interview with Reuters on Thursday, Mantega said the real is
floating "without causing damage to the exporter nor to the
importer of machinery and equipment."
Facilitating imports of machinery is seen as crucial for
Brazil to unlock much-needed investment in industry.
Pimentel also reiterated that, in order to boost investment,
the government will give more payroll tax breaks "to all sectors
of the economy in the medium term."