Jim, Brazil just got an interest rate raise, to 18.25% and they borrowed $2 billion from the IMF, all in one day, and they are looking for another $8-10 billion, just for some pocket change, while unemployment is increasing.
Certainly not a Carnival atmosphere in Rio these days...
Brazil raising $10.8 billion to prop up currency
BRASILIA, Brazil, June 21 (Reuters) - Brazilian Central Bank President Arminio Fraga said on Thursday the government planned to build up a $10.8 billion war chest of extra foreign funds to shore up its reserves and prop up its embattled currency.
Fraga said $6.2 billion in new funds would be channeled into reserves while the remaining $4.6 billion could used to intervene in the exchange market at a time when its currency, the real, has sunk to all time lows.
The real soared over 3 percent to 2.391 reals per U.S. dollar after the announcements.
On Tuesday, the real hit an all time low of 2.480, a 27 percent depreciation in the year so far, after repeatedly being hit by jitters over financial and economic woes in neighboring Argentina and a slew of local worries, including an energy crisis.
Fraga said the government would raise the funds by drawing $2 billion from the International Monetary Fund under a loan agreement that expires at year's end and by suspending a $1.8 billion loan payment it planned to pay to the IMF this year.
He said Brazil would also secure $1.8 billion from international lending agencies and issue $1 billion more in international bonds than originally planned, bringing the total for the year to $7 billion.
The total also included a $400 million bond already issued by the BNDES, the National Development Bank. The remaining $3.8 billion will come from sales of stock in publicly-owned companies.
Note-- they used to have 7000% inflation, I think it is under 100 now...
Chile having some currency troubles too, so it is working it's way up Norte.... |
