Mr. LIN SHAO-WEN (Deputy Newsroom Director, China Radio International): The government here is saying that this is a market economy so it will take some measures to work for a manageable, freer flow of the exchange rate.

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Moreover, the Central Bank is likely to welcome the strengthening of the BRL, as appreciation can help ease some of the building inflationary pressure that higher food prices and a stable exchange rate were allowing to flow through to the economy.

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Some economists are expecting wider fluctuation of the exchange rate due to uncertain foreign capital flow.

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Often, an unequal flow of currency reduces the supply of money in the nation and can lead to an increase in the exchange rate relative to the dollar, leading to inflation and, in a worst case, labor market pressures leading to unemployment.

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