Brazil’s foreign minister warns against overappreciation of real

Brazilian Foreign Minister Jose Serra warned against the excessive appreciation of the country’s currency as it could hurt exporters, revealing concerns in the interim government that a stronger real could further sink an economy mired in recession.

In an interview late on Thursday, which also included written answers to questions from Reuters, Serra said the strengthening of the real, which has appreciated about 30 percent since its year low in mid-January, has reflected a fall in political uncertainty under the administration of interim President Michel Temer.

“I believe (the real) will stay around where it is,” Serra said in a written response. “It would be very bad for the real to appreciate excessively because the current level only compensates for the overappreciation that we saw in a relatively recent period.”

His comments appeared to contradict those of members of the economic team led by Finance Minister Henrique Meirelles, which have signaled less intervention in the currency to allow the real to float more freely.

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