Brazil refuses bids, fails to sell LBCs at auction
Reuters, Thursday, September 10, 1998 at 15:00
SAO PAULO, Sept 10 (Reuters) - Brazil's Central Bank on
Thursday refused the bids and did not sell any of the four
billion reais worth of 91-day, post-fixed Central Bank Letters
(LBCs) at its weekly auction, dealers said.
Dealers said that the Central Bank did not sell the
floating interest rate papers because it was not ready to pay
the premium wanted by banks due to global financial turmoil.
The LBCs, which carry less risk for investors when compared
to letters paying prefixed rates, pay rates that are set after
they mature, and fluctuate based on the average overnight
benchmark rate in the period.
Thursday's auction would not impact the system's liquidity
because there are no old papers maturing on Friday, dealers
said.
Copyright 1998, Reuters News Service
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