Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 1.090

+3.8%

Nov 14 9:30 AM EST

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To: Bob Howarth who wrote (12149)	1/21/1999 11:26:00 AM
From: Steve Fancy	Read Replies (1) of 22640

Real plunges on rumors of heavy dollar outflow São Paulo, 21 - The commercial dollar surprised the market this morning when it surpassed the limit of R$ 1.60 amid rumors, not confirmed by some dealers consulted by Agência Estado, of a heavy dollar outflow led by national oil company Petrobrás. After the Central Bank announced it allowed the real to free-float last Friday, the government started to consider the limit of R$ 1.60 as a sort of an informal real trade ceiling. This morning megainvestor George Soros declared that Brazil's interest rates, already at over 40% yearly, are much too high and that the International Monetary Fund (IMF) gave Brazil a "bad advice" when it suggested the country to increase its rates. Soros' shock wave declarations also contributed to send negative vibrations throughout the market. The news agency, Bloomberg, also cited the dwindling stock of dollars at commercial banks due to capital flight of more than US$500m a day this month as another reason for the real weakening against the dollar. At 9:42 a.m. the real was plunging 7.40% against the dollar to R$ 1.69 -- its weakest ever -- from yesterday's closing rate of R$ 1.58. (By Lucinda Pinto and Paulo R. Monteiro Dias)

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