If the IMF gives into the request which is suggested in the following article, I will have lost all faith in the ability of the IMF to understand reality. If there is one more disbursement prior to passage of CMPF and real social security reform and the staring down of the rebellious states, I'll be in Washington lobbying for the repeal of funding to the IMF as a pure waste of our taxpayer's money!
Brazilian Finance Minister Says Nation May Ask for Earlier Loan
Dow Jones Newswires
WASHINGTON -- Brazil's minister of finance said it is "possible" his government will ask for early disbursement of the second round of loans available under the $41.5 billion international rescue package organized last November by the International Monetary Fund.
Pedro Malan arrived Saturday in Washington for negotiations with the IMF, World Bank, the Inter-American Development Bank and the U.S.
Treasury Department.
Mr. Malan said the Brazilian government will announce a new foreign
exchange trading system Monday, after the conclusion of this weekend's
discussions in the U.S. He said his delegation has "a plan" that it will present to the IMF and others during the course of the weekend.
"We have discussed this internally .. and we will announce this on
Monday," Mr. Malan said.
The Finance Minister confirmed his initial discussions with the IMF will begin later Saturday. Lawrence Summers, deputy secretary of the
Treasury, will meet the Brazilian delegation Sunday.
Mr. Malan's trip to Washington follows a wild economic week in Brazil that culminated in Friday's decision by the government to release the real from its trading band, accompanied by a central bank pledge that it wouldn't intervene to support the currency.
The government said a new exchange rate system would be drafted and
unveiled Monday after consultations in Washington.
Mr. Malan said "we never lost the confidence of the IMF" despite
Wednesday's unexpected announcement of a wider trading band for the
real and the resignation of Central Bank President Gustavo Franco.
The finance minister said the international investment community appeared to have responded favorably to Friday's decision that effectively led to a free float of the real. He added Brazil was still considered an attractive investment option despite the currency and economic crises that intensified during 1998. "Witness the fact that last year we had $25 billion of foreign direct investment in Brazil," Mr. Malan said. "If this is not an expression of confidence, I don't know what it is."
Mr. Malan added the Brazilian government will continue to press ahead with the reform program drafted by President Fernando Henrique
Cardoso. He said "we have a program that we are fulfilling, we are
meeting the targets and this will continue."
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