And unconventional measures are what the Governing Council decided on in its June and September meetings with the launch of targeted long-term refinancing operations and two asset purchase programmes, the details of which were presented two weeks ago. The asset purchase programmes have triggered a debate, as their justification insinuates a shift from programmes specifically aimed at credit easing towards a quantitative easing philosophy.
The fact that Brazil is being hit by a further capital account crisis in spite of its floating exchange rate by no means weakens the arguments for floating regimes. Brazil indexed a substantial share of its domestically issued public debt to the exchange rate of the dollar.