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To: Kenny Low who wrote (7287)	10/5/1998 4:23:00 PM
From: Dean	Respond to of 9569

Here's the latest on Brazil. Hope we get some of that 30 billion ! Quick someone raise the price of those test kits! WASHINGTON (Reuters) - Brazil's government, pumped by the support of Brazilian voters, is moving closer to securing a financial aid package that will help the country's battered economy ride out the storm on capital markets, officials said Monday. International Monetary Fund officials said Brazil was in line for a financial aid package that would be announced once President Fernando Henrique Cardoso unveils a tough program of spending cuts expected in the next week or so. ''We are actively exchanging ideas with the IMF...and we may indeed reach an understanding on international resources to help Brazil go forward with our fiscal program,'' Brazil's Central Bank President Gustavo Franco said. Franco said it was still too early to put a figure on the package for Brazil, which investors expect to be between $25 and $30 billion. Financial aid from the IMF is seen as crucial to defending the Brazilian currency, the real, from collapsing under the heavy strain it has suffered since the Aug. 17 default by Russia caused panic on markets. ''It is early to say. It is being discussed and will soon be released,'' he told investors and analysts on the sidelines of the annual IMF and World Bank meetings in Washington. Bundesbank president Hans Tietmeyer said the IMF hoped to have an overall plan to ensure stability in Brazil soon. ''We want to reach an overall concept in the foreseeable future,'' Tietmeyer told a news conference. Tietmeyer said Brazil had to present a credible program for its economy and the involvement of private banks resolved before the IMF decided on its contribution. President Cardoso appeared to have won a historic second term in Sunday's elections, with over half the votes counted giving him enough of a lead to avoid a damaging run-off. The social democrat president won 50.4 percent of the vote versus 34.86 percent for left-wing challenger Luiz Inacio Lula da Silva, after 52 percent of the votes had been counted. That slimmer-than-expected margin was not enough to settle world financial markets, which are nervously watching Latin America's largest economy for signs that its currency, the real, could follow the Russian rouble to devaluation. The result was not enough to boost optimism in local markets, where Brazilian shares fell 5 percent in morning trading, as investors wait to see how tough the government's cut will be. Franco said Brazilian authorities were hurrying to draw up a three-year economic program now that the Brazilian people had voted in support of the government's strategy to stabilize the economy and reduce the state's enormous deficits. ''This is being hurried. It is under way. It will take some time to unfold, but we will start to release it as soon as possible,'' Franco said. The Central Bank chief said the austerity program should bring interest rates down and thus reduce the high cost Brazil faces in financing its public debt. Franco said Brazil's capital market financing needs through the end of next year were ''very moderate'' thanks to the continued inflow of foreign direct investment and trade financing. ''Our problem is one of confidence ... and the question of restoring confidence goes well beyond Brazil,'' he said. ''The only thing we need from international markets is normalcy ... a rapid normalization of markets,'' Franco said. Brazil has lost $28 billion through foreign exchange markets since the beginning of August. With an economy that accounts for 45 percent of Latin American gross domestic product and $35 billion of investment from U.S. firms, the worry is that if Brazil falls, it will drag down the region. Franco stressed there would be no devaluation of the real. IMF officials have said it was ''conceivable'' that Brazil could speed up the pace of its crawling-peg depreciation of the real against the U.S. dollar. ''That is not under discussion,'' Franco told reporters. ^REUTERS@