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Strategies & Market Trends : Telebras (TBH) & Brazil -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (1123)	3/5/1998 2:13:00 PM
From: Steve Fancy	Respond to of 22640

Brazil's Kandir sees rates at 20 pct by mid-'98 Reuters, Thursday, March 05, 1998 at 11:30 SAO PAULO, March 5 (Reuters) - Brazil's Planning Minister Antonio Kandir said he expects interest rates to fall to 20 percent a year by mid-1998 particularly if the government gets congressional approval of its pension reform bill. "We are creating conditions to lower interest rates to an annualized 20 percent by the middle of this year," Kandir told reporters Thursday, noting that approval of the social security reform is a key element in allowing for further sharp rate cuts. Late Wednesday, Brazil lowered its TBC prime lending rate to 28 percent a year from 34.5 percent, the largest cut since October, when rates were nearly doubled to defend the real currency during the worst days of the Asian financial turbulence. Kandir said the pension reform would help the goverment save 3.4 billion reais in the first year of its implementation, reducing pressure on Brazil's fiscal accounts and allowing for lower interest rates. Speaking at a conference on Brazilian capital markets, Kandir said Wednesday's steep rate decline was possible due to several factors: improved foreign reserves, investors' perception of lower risk after the government's fast response to the Asian crisis, and prospects for approval of key reforms. But he recognized that domestic interest rates are still at high levels. He also stressed that the government would not do anything that could put Brazil's economic stability at risk. Copyright 1998, Reuters News Service