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Article: Fat 'real' makes Brazilian exports hard to digest.(Brazilian currency)
- Article from:
- Footwear News
- Article date:
- April 8, 1996
- Author:
CopyrightCOPYRIGHT 1996 Conde Nast Publications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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SAO PAULO - A still-overvalued currency continues to be a negative factor for the Brazilian shoe industry.
During 1995, a gradual devaluation of the currency, the real, helped footwear exports recover some of the losses caused by its overvaluation when it was put into circulation in July 1994. The real, then worth 20 percent more than the dollar, is now worth around 3 percent more.
That still has a substantial impact on dollar-based footwear revenues. And, those revenues have also been undercut by higher production costs fueled by 23 percent yearly inflation, increased labor costs and high interest rates, now at 3.5 percent a month.
As a result, in 1995 ...