IMF is unemployed: Fed and other central banks assumed stabilization role in world credit crisis
“IMF is unemployed”, said today Natan Blanche, Tendencias Consulting´CEO in Sao Paulo, commenting the impact from intrnational credit crisis on Brazilian economy this year and 2008.
What he menas is that the whole job is being done by the Fed and other central banks in Europe and Asis, in a completely new situation of global economy.
Tomorrow Bank of Japn is to decide wheter the present interest rates should be kept or raised a hl point or so.
Similar expectation feeds the stock markets all over, as Federal Reserve let it be understood that could hapen in Sept 18th or even ealier. The Fed it would make everything that could be necessary to stabilize the credit markets.
Fusions and assets shifting estimulated good results also in Europe, following New York, and Sao Paulo, up 3,87% at the end of the day.
The europeans are the ones to suffer the largest piece of loss in the already running assets accomodation.
The problem for president Lula team is now to figure out what´s gonna happen to exchange rate at home and how the world economy will react to lower groth in US.
Dollar at this momment ( 1h30PM) is stable in its new equlibirium point, around 2 reals: after been up at 2,2 and the stepping back at R$ 2,11. Before the crisis US currency was worht R$ 1,80.
Anyway, Brazilian GNP must growth around 5% this year but can suffer next year the negative impact of fiscal adjustment beeing the confidence word and of lower economic growth at the Unidades States, 25% of global economy.
Economist Blanche said it´s possible but he himself doesn´t believe in interest rates reductions by the Fed.
The job is being done and probably will continue to be doing by the Fed and its similars, using classical monethary tools such to inject or extract money from the banking system.
That´s why we maybe should look for another job for International Monetary Fund (IMF).
