Many of the changes demanded by foreign investors are beyond Fraga's domain. "Brazil's economic health depends on the central government's convincing state governors to cut spending and increase taxes," says Baumohl. "That's a political battle over which the central bank has no control." Still, anything that suggests speculative compassion from Soros -- however wishfully -- certainly can't hurt a vulnerable currency.
Will investors be reassured by one of their own? Brazil put a former George Soros aide in charge of its central bank, hoping that Arminio Fraga Neto's track record might restore investor confidence. The real strengthened on the news, but it may take more than appointing a former Soros investment director to turn the country around. "To regain the confidence of foreign investors and the IMF, Fraga will have to convince them that Brazil can close its budget gap and restore its financial health," says TIME senior business reporter Bernard Baumohl. "There may be a momentary rebound in the real, but only time will tell whether anything of substance has changed."