Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 0.507

+0.4%

Jan 6 3:59 PM EST

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To: djane who wrote (7553)	9/4/1998 11:41:00 PM
From: Steve Fancy	of 22640

Brazil Ctrl Bk Suspends Funding To Banks At TBC 19% Rate Dow Jones Newswires BRASILIA -- While capital streams out of Brazil at an alarming rate, the Brazilian Central Bank moved Friday to tighten its lending to local banks and curb their investments in the Brady bond market. The Central Bank suspended from Sept. 8 to Sept. 30 lending to banks at the basic rate, known as the TBC, now at 19%. Banks needing funding from the monetary authority during this time will have to borrow at the ceiling rate, known as the TBAN, which stands at 29.75% Payments due on previous borrowing at the TBC rate must be paid off on Sept. 8. Central Bank spokeswoman Silvia Faria said the bank took the measures because too much money was being borrowed by banks at the TBC rate to invest in Brady bonds. The measure was decided on Wednesday at the Central Bank's Monetary Policy Committee meeting, the Central Bank said. At that meeting the TBC rate was lowered to 19% from 19.75% and the TBAN rate was raised to 29.75% from 25.75%. Two weeks ago the Central Bank decided that banks borrowing money from the monetary authority at only less than a daily average of 5 billion reals (BRL) ($1=BRL1.17) - calculated on a weekly basis - will pay the basic TBC rate as from Oct. 1. A Central Bank spokesman said Friday this rule remains in force for the time being. Previously the TBC rate applied to loans up to BRL22 billion. "But as from Sept. 8 through Sept. 30 all will pay the ceiling (TBAN) rate," he said. The spokesman added that possible new measures might alter the BRL5 billion limit before Oct.1. He said the measure was aimed at diminishing cash in circulation and that this would consequently lead to a squeeze on consumer credit, but would not affect public accounts. -By William Vanvolsem; (5561) 244 3095; wvanvolsem@ap.org

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