The " Hot Money " Phenomenon in Brazil

Mylène Gaulard

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Abstract: Because of its high interest rates, Brazil attracts more and more speculative capital flows, called " hot money " , under the form of foreign loans, direct or portfolio investments. Actually, the country is directly involved in a carry-trade strategy that tends to appreciate the real, what penalizes the Brazilian exportations of manufactured products. Moreover, capital inflows are extremely volatile, and their departure, causing a fall in loans granted to the Brazilian private banks, could provoke a dangerous burst of the speculative bubble they have contributed to form in the Brazilian real estate sector.

Keywords: Brazil; Carry-trade; Capital inflows; Speculative bubbles (search for similar items in EconPapers)
Date: 2012-09
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Published in Revista de economia politica/Brazilian journal of political economy, 2012

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Journal Article: The “hot money” phenomenon in Brazil (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01811575

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