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Brazil’s Foreign Reserves Rise from June to July

The Banco Central do Brasil increased foreign reserves in July from the previous month. Total foreign exchange reserves for Brazil amounted to US$ 376.2 billion an increase from US$ 373.9 billion in June.

Brazil has large foreign reserves to act as a cushion for certain economic scenarios. Emerging market economies with relatively large international reserves were better suited to handle the negative effects during the global financial crisis. The higher level of foreign reserves has enabled Brazil to intervene in the foreign exchange market to stabilize their currencies in times of need. In addition, the central bank was able to provide foreign exchange swap lines to local corporations during times of economic stress.

International Reserve Management
Banco Central do Brasil manages the international reserves. Most of the international reserves are in fixed income investments, most notably sovereign bonds, government agency bonds, supranational bonds, and fixed-term bank deposits.

December 2010 Asset Allocation of International Reserves

  • 80.2% – Sovereign Bonds
  • 10.2% – Central Bank and Supranational Deposits
  • 5.9% – Government Agency Bonds
  • 1.8% – Supranational Bonds
  • 1.2% – Commercial Bank
  • 0.7% – Other Assets including Gold

Brazil’s Official Reserve Assets in Billions (USD)

Dec 2009 Dec 2010 Dec 2011 June 2012
238.50 288.575 352.012 373.910

Note: Marked-to-market positions since November, 2000.
Source: Banco Central do Brasil

UNICEF and NBIM to Host Meetings on Children’s Human Rights

The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.

According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”

NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.

“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.

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SouthGobi’s CEO Arrested, CIC Struggles with Investment

The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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