Flash: Brazil Central Bank to eliminate short-Dollar required reserves - BBH

Brown Brothers Harriman analysts note that the Brazilian central bank announced late yesterday that it would eliminate the reserves required on short dollar positions held by local banks as of July 1.

They add that in 2011, to dampen the upward pressure on the real, the central bank required banks to deposit 60% of the short dollar positions in excess of $3 bln in a non-interest bearing account. Separately, and unrelated, they add that Taiwan, which has seen foreign investors sell $4.2 bln of its equities this month alone (completely reversing the inflows in the January-May period), announced it would cut the capital gains tax on sales of more than TWD1 bln to 0.1% from 2.25%.