Brazil forex mkts seen losing more dollars on Wed
Reuters, Wednesday, September 09, 1998 at 14:17
SAO PAULO, Sept 9 (Reuters) - Unabated nervousness in world
financial markets put new pressure on Brazil's local markets on
Wednesday, according to foreign exchange dealers who reported
seeing big dollar outflows during the trading day.
Dealers estimated that about $850 million would flee the
country's commercial and floating forex markets by the end of
the day Wednesday, after they saw a net drainage of $885
million on Tuesday.
Tuesday's dollar outflow, while robust, remained well below
a $2.925 billion drainage posted last Friday -- the biggest
one-day outflow since last year's Asian crisis.
Outflows had declined significantly after the government
said late Friday that it was effectively raising prime lending
rates by 50 percent to nearly 30 percent.
Markets were closed on Monday for the Independence Day
holiday.
On Wednesday, the Central Bank announced additional
measures to cap continuous outflows of the U.S. currency.
It launched new dollar-indexed notes linked to the dollar
rate in the floating exchange market, in a bid to give
investors a way to hedge their positions in the local currency
real.
Meanwhile, forex dealers speculated the Central Bank,
through state-owned Banco do Brasil, was selling dollars in the
forex markets Wednesday to relieve pressure on the exchange
rate amid the dollar outflows.
The real weakened to 1.1790 against the dollar, or down
0.24 percent from Tuesday's close by 1445 local/1745 gmt.
Copyright 1998, Reuters News Service
|
