Brazil is a democratic federal state with presidential system of government, located in Eastern South America. It is the 8th largest economy in the world (by GDP PPP) and is a major exporter of natural resources – specifically, soybeans, sugar, coffee, corn, iron ore and oil. Around 50% of Brazil’s merchandise exports are directed to just three markets (China, the European Union and United States), but total trade volume amounts to just 12% of GDP, which is a relatively low figure for a commodity exporter. The central bank, Banco Central do Brazil (CBB), pursues an inflation-targeting approach to monetary policy and maintains a floating exchange rate regime. Brazilian real is correlated with the prices for key export commodities, but not very closely. Manufacturing sector of Brazil is the third-largest in the Americas, accounting for 29% of national income. Economic weaknesses include: dependence on commodity prices, corruption, political and social tensions, high taxation and large fiscal deficits.