Brazil’s double rise in its financial transaction tax (imposto sobre operações financeiras – IOF) in October might not achieve its primary aim of slowing capital inflows and the real’s appreciation but it did add to the appeal of the country’s real-denominated global bond launched last month.
On October 18 the Brazilian government raised the IOF entry tax on portfolio inflows into fixed-income instruments to 6%, just two weeks after it had raised it to 4% from 2%. The move is aimed to stem capital inflows into the country, which have led to appreciation in the real (up 12% since July) and lowered the country’s...
