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Brazil has stepped up its “currency war”, a day after the International Monetary Fund tacitly endorsed the use of capital controls, with the announcement of the fourth set of measures within a month to help control its exchange rate.nike running shoes online,

Guido Mantega, the finance minister, said the government would extend a 6 per cent tax on repatriated foreign borrowings to loans or bonds with a maturity of up to 720 days, compared with the previous limit of up to 360 days.

The IMF proposed its first guidelines this week on the use of measures to control inflows of speculative capital, in a move seen as legitimising a tool it had once staunchly opposed.

The IMF framework follows a series of measures adopted by Brazil and other fast-growing emerging markets aimed at stemming a flood of money from foreign investors keen to cash in on their strong economies and high interest rates.

Brazil has been fighting to keep its currency, the real, trading at about 1.65 to the US dollar – a level that is almost 40 per cent higher than two years ago. But in recent weeks, the currency has strengthened further.

The real went below 1.60 for the first time since August 2008 on Wednesday but later reversed track to trade at about 1.613 after the government said it was poised to act.online, buy Reebok ZigTech online

Latin America’s largest economy fears a strong currency will lead to a hollowing out of its industrial base by undermining the competitiveness of its manufactured exports and encouraging cheap imports.

Analysts said Mr Mantega’s comments indicated Brasília was willing to tolerate a stronger currency while limiting the volatility of any shifts in its value.

The minister said the real would have touched 1.50 had he not acted. He also reassured the market that the government would not tax more desirable inflows from abroad, such as foreign direct investment, considered crucial to Brazil’s infrastructure programme.

“He said the appreciation of the currency is inevitable because of the economic situation,” said Marcelo Salomon of Barclays.

The latest measure is aimed at preventing Brazilian companies from borrowing dollars on short-term maturities at low interest rates on international markets and then exchanging the money for local currency and lending this at Brazil’s high rates.online, buy Reebok ZigTech online