Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 0.430

+6.6%

11:41 AM EST

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To: djane who wrote (7319)	8/31/1998 7:27:00 PM
From: djane	Read Replies (1) of 22640

Brazil's Cardoso sees no need to raise rates Monday August 31, 7:07 pm Eastern Time BRASILIA, Aug 31 (Reuters) - Brazilian President Fernando Henrique Cardoso does not think interest rates need to be raised to bring dollars into Brazil, a presidential spokesman said Monday. ''The government does not see the need for an increase in interest rates,'' the spokesman told reporters at a daily briefing. ''The economic team has already taken the necessary measures to stimulate inflows of foreign capital.'' Rather than increase the cost of money, the government ''would like to see a reduction in interest rates,'' the spokesman said. As Brazilian markets reel amid the fallout from Russia's financial crisis, the Monetary Policy Committee of Brazil's Central Bank is preparing for a monthly meeting Wednesday to set the bank's prime lending rate, the TBC, for September. Some analysts have suggested the bank might raise the TBC from its current 19.75 percent annual to attract foreign capital and bolster the country's foreign currency reserves. But most economists predict the rate will be left as it is or perhaps even reduced slightly, in keeping with a gradual reduction from the doubling of the TBC to 43 percent in October last year at the onset of Asia's financial crisis. Cardoso is seeking to win presidential elections Oct. 4 and an increase in interest rates might hurt his currently strong approval ratings. Debt specialists also point to a shift in the profile of Brazil's domestic debt much of which now pays floating rates. Any increase in Brazil's TBC would have a huge impact on the government's debt servicing costs. Related News Categories: international Help Copyright c 1998 Reuters Limited. All rights reserved.

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