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Strategies & Market Trends : Telebras (TBH) & Brazil
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To: Steve Fancy who wrote (11855)1/15/1999 5:43:00 PM
From: Steve Fancy  Read Replies (2) of 22640
 
Brazil's Cardoso says currency float restored faith

Reuters, Friday, January 15, 1999 at 16:56

BRASILIA, Jan 15 (Reuters) - Brazilian President Fernando
Henrique Cardoso said on Friday the Central Bank's decision to
allow the currency to float restored confidence in Latin
America's largest economy, but he vowed to continue defending
the real.
Speaking to the nation after the Central Bank suspended its
policy of holding the currency in a foreign exchange trading
range, Cardoso said the decision was made to preserve foreign
reserves and to encourage a decline in sky-high interest rates.
"I am obliged to defend the real," Cardoso said. "I could
not let the reserves continue to seep out and leave Brazil
without defenses. This way, we maintain our reserves."
Cardoso said: "The change in the exchange rate removes lack
of confidence in the economy and creates the conditions so that
in the near future we can let interest rates fall."
The Brazilian leader, re-elected in October on the back of
the inflation-busting real, said fiscal reform was more
important now than ever and that he trusted Congress to push
through measures designed to tackle a huge public-sector fiscal
deficit equal to 8 percent of gross domestic product.
Cardoso vowed to honor all Brazil's international
obligations and comply with macroeconomic targets set under an
international rescue package. He also reiterated his confidence
in Finance Minister Pedro Malan.

Copyright 1999, Reuters News Service

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