Brazil Real Fluctuates as Bond Tax Elimination Adds to Uncertainty (EWZ) (BZF)
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iShares MSCI Brazil Index (NYSE: EWZ) and WisdomTree Dreyfus ETF Brazil Real Fund (NYSE: BZF) ETFs are on watch Wednesday as the Brazilian government is said to have scrapped a plan to impose a tax on foreign bond purchases.
The news initially sent the Brazilian real lower, though the country's central bank moved quickly to stem the dip.
The WSJ noted today that Brazil initially said it would cut a 6 percent tax on some bond purchases, leaving investors to question whether the move would reverse or accelerate cash flow out of the country. Brazil's central bank then said it would sell up to $2 billion of foreign exchange swap contracts to stabilize the currency.
Many outside investors have questioned investments in Brazil given the recent mounting of economic issues. The tax was previously a barrier to foreign investors, who generally like Brazilian bonds for higher yields.
Both ETFs are lower. The real is down 0.3 percent to about $2.1262.
The news initially sent the Brazilian real lower, though the country's central bank moved quickly to stem the dip.
The WSJ noted today that Brazil initially said it would cut a 6 percent tax on some bond purchases, leaving investors to question whether the move would reverse or accelerate cash flow out of the country. Brazil's central bank then said it would sell up to $2 billion of foreign exchange swap contracts to stabilize the currency.
Many outside investors have questioned investments in Brazil given the recent mounting of economic issues. The tax was previously a barrier to foreign investors, who generally like Brazilian bonds for higher yields.
Both ETFs are lower. The real is down 0.3 percent to about $2.1262.
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