Menem sees no Brazil devaluation,reserves can cope
Reuters, Tuesday, January 12, 1999 at 19:17
WASHINGTON, Jan 12 (Reuters) - Argentine President Carlos
Menem does not expect neighboring Brazil to devalue its
currency and believes reserves are adequate to cope with "any
sort of crisis."
Menem told a meeting in Washington that he had discussed
currency issues with Brazilian President Fernando Henrique
Cardoso after Cardoso's election last year.
"I don't believe Brazil will devalue its currency," he
said, noting that a $41 billion international rescue package
had already contributed significantly to Brazil's finances.
"With Brazilian reserves as they are at present they can
face any sort of crisis or run in Brazil," he said through an
interpreter. "They have lost a lot but they still have a lot."
Markets fear that massive outflows of dollars may force
Brazil to devalue its currency, the real, and traders are
alarmed by a 90-day debt moratorium announced last week by the
governor of one of Brazil's largest states.
"They have one governor in one of their states who made
terrible statements...that was criticized by other (opposition)
governors," Menem said. "I believe this will probably help
President Cardoso to have his draft laws passed by the
Brazilian Congress."
Congress must pass a series of spending laws for Brazil to
win the next installment of its international loan package,
which is being coordinated by the International Monetary Fund.
898-8383, washington.economic.newsroom@reuters.com))
Copyright 1999, Reuters News Service
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