Coffee Valuation Policy

As the most important product of the Brazilian economy, coffee commanded the economic policy of the First Republic. The financial measures adopted by the governments of that period were basically aimed at favoring agriculture and the coffee trade. The other sectors, such as industry, only suffered the consequences of the policy determined in terms of coffee.
To protect the interests of coffee growers, it was necessary to keep the value of the national currency low. Thus, even if the price of coffee abroad was low, when converted into Brazilian currency, it brought good profits to farmers. The devaluation of the national currency made imported products more expensive. This fact had two different effects on industrialization:
The increase in the cost of imported products made the consumer market turn to products manufactured in the country, thus benefiting the Brazilian industry. The cost of imported machinery and equipment made it difficult to install new factories, harming our industry.

Brazil Republic - history of Brazil - Brazil School

Source: Brazil School - https://brasilescola.uol.com.br/historiab/valorizacao-cafe.htm

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