RIO DE JANEIRO, May 16 (Reuters) - The discovery of crude
oil reserves off the Brazilian coast means commodity prices will
continue to be one of the key determinants of the local exchange
rate in the future, a central bank researcher said on Friday.
Emanuel Kohlscheen said during a presentation at a central
bank seminar that a series of tests showed monetary policy had
not had as big an influence on the real as previously
He said the increase in the prices of a basket of 5
commodities, including ores, meat, soybeans, oil and sugar, were
behind the sharp appreciation of the real between 2005 and 2011.
Other factors that explained currency movements in Brazil
were global and country-specific risks. Although exports make up
just over 10 percent of the Brazilian economy, the South
American country is a major seller of iron ore, soy and corn.
"Surprisingly, interest rate differentials do not explain
the appreciation of the currency during that time (2005 and
2011)," Kohlscheen said at the inflation-targeting seminar in
Rio de Janeiro.
"Looking forward, the discovery of oil suggests that
commodity prices will be an important factor in determining the
exchange rate in Brazil."
Many economists believe the Brazilian central bank has
allowed the real to appreciate this year to help it battle
naggingly high inflation. A stronger real reduces the price of
imports into Brazil.
Kohlscheen's findings were based on a paper in which he
analysed data from 1999 through late-2012.
(Reporting by Alonso Soto; Editing by Bernadette Baum)