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

To: Steve Fancy who wrote (7472)	9/3/1998 10:22:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

Brazil's Malan: Moody's Downgrade Based On Inadequate Info Dow Jones Newswires WASHINGTON -- Brazilian Finance Minister Pedro Malan on Thursday sharply criticized Moody's Investors Service for downgrading Brazil, saying that the rating agency doesn't know how to evaluate sovereign risk. "I find surprising that this has been done on the day of this meeting, with markets open, and even more surprising because Moody's didn't do like other agencies and go to the Central Bank and go to the Finance Ministry and try to exchange ideas with us. They didn't do any of that," Malan said as he left a meeting between Latin American policy makers and the International Monetary Fund. Moody's earlier Thursday downgraded Brazil's country ceiling for foreign currency bonds and notes to B2 and the country ceiling for foreign currency bank deposits to Caa1. Malan said that with the decision to cut Brazil's ratings - and other Moody's action against Venezuela, Argentina and Mexico - showed the agency doesn't evaluation sovereign risk properly. "I believe that this shows that some agencies should invest much more than they have up until now in evaluating sovereign risk. Evaluating the risk of a company is very different from evaluating the risk of sovereign countries," he said. He said he believed that Moody's was attempting to protect its reputation and anticipate a larger crisis in Latin America - which it failed to do in Asia.

To: Steve Fancy who wrote (7472)	9/3/1998 10:37:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 22640

Peru can weather new financial storms -Baca Reuters, Thursday, September 03, 1998 at 22:24 WASHINGTON, Sept 3 (Reuters) - Peru feels no pressure to intervene in foreign exchange markets to devalue the sol and is in a better position than most of its neighbors to withstand any new regional financial crunch, Finance Minister Jorge Baca said Thursday. Reporters asked Baca if Peru might intervene to devalue its free-floating sol currency, which has already depreciated sharply in recent weeks. "On the contrary," he said. "We've seen that Peru is one of the outstanding countries in the region because we have a zero deficit, we have a free exchange rate, and solid and prudent exchange rates." Speculation about major currency devaluations in Latin America has heightened with financial turmoil in Russia and with Colombia's de facto devaluation of its peso on Wednesday. Baca said that speculation about devaluations had centered on Brazil "because it has a fiscal deficit, and in the case of Venezuela for obvious reasons." But the conditions that might call for devaluation in those countries do not apply in Peru, he told reporters after a meeting of top Latin American financial officials with International Monetary Fund leaders and U.S. Treasury Secretary Robert Rubin. "We are not Russia. We are in perfectly good condition to pay and service our (foreign) debt, not just now but in the future, because we are applying the correct fiscal measures, and for that reason we should be differentiated from the others," he said. But he said no Latin American country expressed any problems with paying or servicing its debts during the day-long meeting at the IMF. He said global financial turmoil would not affect Peru's economic growth forecast of 3-4 percent for this year, a rate which was already down from 5 percent because of damage to fishing and other sectors from the El Nino weather phenomenon. "We are quite certain that the forecasted growth level is correct ... of between three and four percent for the year," he said. Economists at various investment banks have forecast lower growth rates this year, at closer to two percent, but Baca those studies were not taking enough into account strong growth in the fishing and agriculture sectors. +1 202 898-8383, washington.economic.newsroom@reuters.com)) Copyright 1998, Reuters News Service