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SAO PAULO, Nov 6 (Reuters) - Brazil's government may exempt initial public offerings from a new 2 percent tax on capital inflows to help boost funding for domestic companies, O Estado de S. Paulo said on Friday, citing an unnamed finance ministry official. Brazil slapped the 2 percent tax on foreign investments into local stocks and bonds two weeks ago to arrest the surge in the real. The government conditions removal of the tax on IPOs on the securities industry's backing for raising that tax on other investments on growing concerns that moves to curb the real's rally may prove to be ineffective, Estado said without elaborating. One option would be to raise the tax above 2 percent on other financial products, if the real continues to gain ground against the dollar, Estado added.
The real has surged 35 percent against the dollar so far in 2009, the best-performer among the most-widely traded currencies in the world. The government believes the tax's introduction last month marks the end of an era in which emerging market economies were in need of foreign capital, Estado said, citing the official. The policy stance should shift toward moderating capital inflows into these economies, the daily added. A spokeswoman for the finance ministry could not immediately be reached for comment on the Estado story. (Reporting by Guillermo Parra-Bernal, editing by W Simon ) Keywords: BRAZIL ECONOMY/FOREX (guillermo.parra@thomsonreuters.com; +55-11-5644-7714; Reuters Messaging: guillermo.parra.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.
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