Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Steve Fancy who wrote (8795)	10/4/1998 1:47:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Cenbanker says IMF hot to help -- paper Reuters, Sunday, October 04, 1998 at 12:53 SAO PAULO, Oct 4 (Reuters) - A senior official at Brazil's Central Bank said the International Monetary Fund (IMF) was frantic to redeem itself for perceived failures in Russia and Asia by protecting Brazil from crisis, a leading daily reported on Sunday. "Bureaucrats in Washington are embarrassed about their recent failures in Asia and Russia," Francisco Lopes, Central Bank's director of monetary policy told Estado de Sao Paulo newspaper in an interview published on Sunday. "That is where the excitement comes from, almost like an orgasm, based on the perception that Brazil will be a success story," he said. Lopes repeated Brazil was not in need of an emergency aid from the IMF as the country's foreign currency reserves, at $48 billion, were at a reasonable level. But Brazil has nothing against signing an accord with the IMF if it becomes necessary, he added. Meanwhile, Lopes said expectations in local financial circles that Brazil might get emergency financial aid have not necessarily helped the economy. "We need to avoid becoming hysterical about getting financial aid. We have learned that some bureaucrats in Washington were seeking private bankers to say they will participate in an emergency program," he told Estado. Talk that banks may create a separate credit line for Brazil has prompted wary international banks to cancel their lines for the moment pending a new one, Lopes said. "We have not asked anyone to propose to banks to participate in any kind of emergency package," he said. In the same interview, Lopes said the government may ask Brazilians to pay additional tax exceeding 10 billion reais ($8.5 billion) in the coming years as the government grapples with its dire fiscal problems. The tax hike will partially make up for the budget cuts that the government has promised in recent months to alleviate the country's towering fiscal deficit, running at about an annual 7 percent of the Gross Domestic Product (GDP). "More than half of the government's fiscal effort will come from additional tax revenues...something exceeding 10 billion reais," he said. Lopes said any change in the tax system, which could include hikes in direct and indirect taxes and charges on individual financial deals (CPMF), would likely materialize by December. The government has already pledged to cut about 5 billion reais from spending through the end of the year. "We intend to cut 20 to 25 billion reais in 1999 in order to achieve a primary budget surplus of between 2 and 2.5 percent of GDP," he said. The government plans to post a primary budget surplus of 0.48 percent of GDP in 1998. The primary accounts do not include debt payments, as the fiscal, or nominal, accounts do. noriko.yamaguchi@reuters.com)) Copyright 1998, Reuters News Service