Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 1.045

-10.7%

Nov 13 3:59 PM EST

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To: Steve Fancy who wrote (12168)	1/21/1999 2:05:00 PM
From: Steve Fancy	Read Replies (6) of 22640

Brazil/Reserves/Curr Acct -3:Invest Covers 74.7% Of Deficit Dow Jones Newswires Altamir Lopes, economic policy director at the Central Bank, said reserves outflows during December included a scheduled payment of $479 million in principal and interest to the Club of Paris. He said the continuing heavy forex outflows over the past few days aren't affecting the country's officially-held reserves. "There were no Central Bank interventions and the outflows are purely private banks' funds," he said, referring to the $1.5 billion that left the country since the government started tinkering with its forex policy on Jan. 15. Lopes also said that Brazil has already paid $561 million so far this month in interest on its public sector foreign debt. He estimated total interest payments in January at $1.2 billion, of which $1 billion is by the private sector, he said. He also stated that net foreign direct investments in 1998 covered 74.7% of the year's current account deficit. In the period Jan. 1-21, foreign direct investments in the country totaled $830 million, Lopes added. The Central Bank official pointed out that the heavy foreign direct investment in December - "this with the country in full crisis" - was higher than the year's monthly average of $2.2 billion. "This shows continuing long-term international investor confidence in Brazil," he commented. Lopes admitted that debt servicing costs - $15.93 billion in 1998 versus $14.41 billion the year before - will "no doubt rise even more in 1999 because of higher interest rates." He said the Central Bank remains confident of reaching a current account deficit of between 3.5% and 3.8% gross domestic product in 1999 as stated in the letter of intent to the IMF last year. -By William Vanvolsem; (5561) 244 3095; wvanvolsem@ap.org

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