BRAZIL Finance Minister Guido Mantega fears a coming trade war on the back of aggressive monetary policy resulting in volatility in currency markets, reports London's Financial Times.
"This is a currency war that is turning into a trade war. The exchange rate is one of the main drivers of economic policy, more so even than productivity," Mr Mantega said.
Brazil's trade with the US had declined from an annual surplus of about US$15 billion to a deficit of $6 billion because of US efforts to "revive its economy through loose monetary policy", he said.
Mr Mantega said Brazil intervened in the markets to restrain short-selling of the dollar against its currency the real (BRL), which has appreciated by 39 per cent against the dollar over two years.