Abstract
Economic forecast for the end of the year shows an important profit repatriation, dividend payments, and service balance deficit while there is a trade surplus (See on the chart). Such figures are determinant of the sales deficit of 2.7%. Besides, capital account registers a massive growth of FDI inflows reversal from portfolio investments that largely covers the sales deficit by a capital surplus. These changes of public investments traduce the government requirement to raise long term cash flow by contrary to hot financial money.
Considerable capital flows and Foreign exchange intervention have raised foreign exchange reserves that are around US$ 341bn in September. Liquidity ratio reflects that reserves could cover more than one year of importations. Concerning monetary policy, as seen in the domestic sector, inflation is at its highest level since one year. Therefore the Central Bank and government appreciate the money in order to put pressure on this inflation. We expect a gradual and limited depreciation of the real next year, that should also be supported by developed economies' recovery and related exit-strategies (exit of FDI inflows) and by some reduction of commodity prices.
