Brazil eliminates key tax on foreign investment

Thu Oct 23, 2008 8:11am EDT
SAO PAULO, Oct 23 (Reuters) - Brazil's Finance Ministry said it had eliminated from Thursday a key tax that foreigners pay on financial market transactions in Brazil.
The ministry said it had cut to zero from 1.5 percent the IOF tax on currency exchange for inflows of foreign capital.
It also said it had eliminated the 0.38 percent IOF tax on the liquidation of foreign currency loans.
The steps are the latest government measures aimed at restoring liquidity to the banking system and currency market. Brazil's currency, the real BRBY, fell heavily for a second day against the dollar on Thursday, plunging more than 5 percent in early trade.
(Reporting by Renato Andrade; Writing by Stuart Grudgings; Editing by Walker Simon)