Telebras (TBH) & Brazil Message Board

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Strategies & Market Trends : Telebras (TBH) & Brazil

TBH 0.404

-14.1%

Dec 31 3:59 PM EST

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To: Steve Fancy who wrote (15374)	5/18/1999 3:25:00 PM
From: wl9839	Read Replies (1) of 22640

Brazil's Fixed-Rate Debt Yield Falls to 21.85% From 22.21% Brasilia, May 18 (Bloomberg) -- Brazil's borrowing costs fell for a 15th straight Treasury debt auction, paving the way for a Central Bank rate cut tomorrow. The yield on 91-day fixed-rate bills, known as LTNs, fell to 21.85 percent from 22.21 percent last week. The government sold 1 billion reais ($599 million) of the three-month debt. Investors expect the central bank to cut its benchmark overnight rate to as low as 23 percent from 27 percent at its policy committee meeting as inflation slows and the currency steadies. Today's auction may be a sign for central bankers that they can continue to lower rates without sparking an outflow of money. ''People are willing to put their money to work in reais,'' said Frederico da Costa, a money market trader at Oryx Asset Management in Sao Paulo. The declining yields come even as the U.S. Federal Reserve indicated it could raise rates soon. Investors bid for the Brazilian government securities before they knew the outcome of the Fed meeting. The prospect of higher rates there -- which could lure money to the U.S. and away from countries like Brazil -- pushed the real weaker the last two days. The real dropped 0.8 percent over those two days before steadying today at 1.67 to the dollar. The government also sold today 1 billion reais of 182-day fixed-rate bills. Those bills yielded 21.79 percent, down from 23.74 percent last week. The government also sold 1.5 billion reais of 728-day floating-rate bonds, known as LFTs. ------------------------------------------------------------------------ © Copyright 1999, Bloomberg L.P. All Rights Reserved.

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