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

To: Steve Fancy who wrote (9517)	11/9/1998 12:21:00 PM
From: Steve Fancy	Respond to of 22640

IMF's Fischer says Brazil package should help real Reuters, Monday, November 09, 1998 at 01:18 MELBOURNE, Nov 9 (Reuters) - The international rescue package for Brazil was likely to be announced later this week and should underpin the current value of its currency, the real, International Monetary Fund first deputy managing director Stanley Fischer said on Monday. Asked by reporters if the package would be large enough, Fischer told reporters: "I think so." He did not say how big the package would be but monetary sources said on the weekend following talks in Washington that it could be more than US$22 billion. "The broad details have been agreed," Fischer said of the package, but added that documents were still being completed." "I think the Brazil package, including the fact that the Brazilians have a very serious set of policy measures, together with the financial support, will convince investors they can follow the policies they are following," he said. "And they regard maintaining their current exchange rate as very important." "None of this will necessarily happen overnight," he said, noting that Brazil still had to get parts of its fiscal austerity programme through Congress. "Confidence will return gradually as they implement their programmes rather than on the day they sign on the line." The IMF and the world's richest nations on Sunday put final touches on a multibillion-dollar rescue package for crisis-hit Brazil in hope of averting an Asia-style financial meltdown in Latin America. Monetary sources said negotiators for the IMF and the Brazilian government, meeting in Washington, made progress in weekend talks on a letter of intent, laying out the country's policy commitments. Final agreement on the document -- expected on Monday or Tuesday -- would clear the way for more than $22 billion in loans from the IMF, the World Bank and the Inter-American Development Bank. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9517)	11/9/1998 12:22:00 PM
From: Steve Fancy	Respond to of 22640

Brazil policy moving in right direction-G10 Reuters, Monday, November 09, 1998 at 08:38 BASLE, Switzerland, Nov 9 (Reuters) - Bundesbank President Hans Tietmeyer said G10 central bank governors believed recent economic measures by Brazil would help to restore confidence and reduce the danger of a wider Latin American economic crisis. Tietmeyer, briefing journalists after chairing a meeting of G10 central bankers at the Bank for International Settlements, said the programme prepared by the Brazilian government "is going in the right direction." However, he made no reference to any joint move by G10 countries to arrange a loan package for Brazil. Elaborating on the effort to restore confidence in Brazil, Tietmeyer said: "Of course we have discussed what should be done by the international institutions. But this is not our decision." Brazil's central bank governor Gustavo Franco did not attend Monday's meeting in Basle, Tietmeyer said. Asked to elaborate on the G10's stance toward Brazil, he said: "I am not making any more comment, you can be sure -- We have discussed the programme. We have discussed the content of the package (by the Brazilian government). "We think it will be a contribution for restoring the situation and for restoring confidence and overcoming the difficulties of Brazil." Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9517)	11/9/1998 12:23:00 PM
From: Steve Fancy	Respond to of 22640

IMF-Brazil deal unlikely Monday-negotiator Reuters, Monday, November 09, 1998 at 11:03 WASHINGTON, Nov 9 (Reuters) - A Brazilian finance official negotiating with the International Monetary Fund said he did not expect final agreement Monday on a multibillion-dollar rescue package for Brazil. Amaury Bier, Finance Minister Pedro Malan's top aide, told Reuters that negotiators were still working on a letter of intent laying out Brazil's policy commitments. IMF officials said they expected to reach an agreement on the document this week, possibly Monday or Tuesday. When asked if the letter of intent would be completed on Monday, Bier said: "Certainly not today." Bier would not comment on where they were in the talks. The letter of intent would specify economic targets and the amount of financial support Brazil thinks it needs to guard its economy from the financial turmoil. Estimates of the size of Brazil's rescue package -- including bilateral aid -- run from $30 billion to as much as $45 billion. "The broad details have been agreed," IMF First Deputy Managing Director Stanley Fischer said in Melbourne on Monday. But Fischer added that documents were still being completed. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9517)	11/9/1998 12:25:00 PM
From: Steve Fancy	Respond to of 22640

Brazil gov't sends revised 1999 budget to Congress Reuters, Monday, November 09, 1998 at 11:14 BRASILIA, Nov 9 (Reuters) - The Brazilian government sent to Congress Monday a new version of the 1999 federal budget which is expected to detail more than $7 billion in spending cuts. Planning Minister Paulo Paiva delivered the blueprint to the president of Congress, Sen. Antonio Carlos Magalhaes. Officials were due to explain the budget at a news conference later Monday. The government announced last month it planned to cut the budget by 8.7 billion reais ($7.3 billion) as part of its austerity plan to fend off Brazil's financial crisis. Copyright 1998, Reuters News Service

To: Steve Fancy who wrote (9517)	11/9/1998 12:29:00 PM
From: Steve Fancy	Respond to of 22640

IMF Fischer: Brazil Package Has Features Of New Credit Line Dow Jones Newswires MELBOURNE -- The International Monetary Fund's financial support package for Brazil will incorporate features of a proposed new lending facility that may be added to the institution's armory. "This facility will not be ready in time for the announcement of the Brazilian support programs, to be made later this week, but several aspects of the design of the Brazilian package will reflect features that should be present in this new facility," the IMF's first deputy managing director, Stanley Fischer, told a university gathering Monday. The IMF is considering introducing the new facility, which has been proposed by the Group of Seven leading industrial nations. The facility is intended to allow the IMF to offer a line of credit to economies threatened by contagion from troubled economies elsewhere. "It would make available funds, potentially large amounts, to countries...on a precautionary basis. "The money would be lent on a much shorter term, and at higher interest rates, than normal IMF funding," Fischer said. The IMF, World Bank, Inter-American Development Bank, and G-7 countries, are working to put together a package of loans for Brazil. The package is expected to amount to around $30 billion, but reportedly could exceed $40 billion. Earlier, Fischer told reporters that while the broad details of the package have been agreed, final documentation is still to be completed. He said investor confidence in the Brazilian economy will gradually return once the package, and the government's austerity measures, are put in place. He said the loan package should be large enough to prevent Brazil from being forced to devalue its currency. "I think the Brazilian package, including the fact that the Brazilians have a very serious set of policy measures they've taken, will convince investors that (the government) can follow the policies they are following, and (the government) regard maintaining the current exchange rate regime as very important to the success of the Brazilian economy, Fischer said. The G-7 comprises Canada, France, Germany, Italy, Japan, U.K., and U.S. -By Andrew Trounson; 61-3-9619-9348; atrounson@ap.org

To: Steve Fancy who wrote (9517)	11/9/1998 12:31:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Weakens Real Vs Dlr Mini-Band By 0.10 Centavo Dow Jones Newswires SAO PAULO -- Brazil's Central Bank on Monday weakened the real slightly against the dollar, by adjusting the mini-band in which the two currencies trade. The Central Bank regularly weakens the real every two to five working days. The last time it did so was Wednesday. The new band will value the dollar at 1.1845-1.1965 reals (BRR), up 0.10 centavos from the BRR1.1835-1.1955 previously, according to a Central Bank computer transmission. The Central Bank will now buy dollars at BRR1.1845 per dollar and sell them at BRR1.1965 per dollar. The adjustment was carried out via the usual practice of an electronic auction called by the Central Bank. Traders consider the move a "mini-devaluation" within a larger band that is seldom modified. The change was made by shifting the "mini-band" at which the real and dollar trade within the BRR1.12-1.22 per dollar "wide band." The wide-band was last modified by the Central Bank on Jan. 20, after being at BRR1.05-1.14 for nearly a year. After the auction, the real was trading at BRR1.1896 per dollar, compared to Friday's closing mark of BRR1.1882.

To: Steve Fancy who wrote (9517)	11/9/1998 12:46:00 PM
From: Steve Fancy	Respond to of 22640

Bundesbank Tietmeyer Sees Brazil 'Going In Right Direction' Dow Jones Newswires BASEL -- Deutsche Bundesbank President Hans Tietmeyer said Monday that Brazil's fiscal package and an international aid package are "going in the right direction" for boosting the country's economy and investors' confidence. "We hope very much that this will be a confidence-creating one that will contribute to overcoming difficulties in Brazil, and it will reduce the contagion effects which we have seen," Tietmeyer said. He was speaking to reporters after a morning meeting of central bank officials from the Group of 10 industrialized countries, gathered at the Bank for International Settlements, or BIS.

To: Steve Fancy who wrote (9517)	11/9/1998 12:46:00 PM
From: Steve Fancy	Respond to of 22640

U.S. Summers: Brazil's Program To Help Spur Growth Dow Jones Newswires WASHINGTON -- Brazil's proposed fiscal adjustment program, which is expected to receive international backing soon, could help stabilize the region, Deputy Treasury Secretary Lawrence Summers said Monday. "Brazil has faced serious pressures in recent months, pressures that have underlined the need for the country's longstanding fiscal vulnerabilities to be addressed," Summers said in prepared remarks to be delivered before a chemical manufacturers trade group. "President Cardoso has committed the government to a fiscal adjustment program that - decisively implemented - can provide a foundation for future growth and stability," he said. He said the United States and the international community "expressed their desire to support these efforts, in whose success we all have such an important stake." An international lending package for Brazil is expected to be unveiled this week, in an effort to keep South America's largest economy from falling prey to the global economic contagion that has already hit Asia and Russia. Summers also praised Japan for its recent initiatives aimed at propping up its ailing bank sector. "We welcome the Diet decision to make available a significant amount of public funds to strengthen Japan's banks - provided that those funds are used forcefully and with appropriate conditions," he said. However, he also said Japan could do more by increasing government spending, enacting larger tax cuts, and moving forward with policies for stabilizing its financial system and getting rid of bad bank assets. Summers also had cautionary words about Russia, but said the United States is willing where necessary. "Turning to Russia, the situation is difficult," Summers said, describing a political situation where reform is caught in a race between "the forces of oligarchy and crony capitalism" and "the more retrograde elements" of the Russia parliament. While he said the U.S. "stands ready" to help, "the same truth applies to Russia that applies to every other emerging economy." "We cannot want change more than the country itself does. We stand willing to support a viable economic program in Russia in the future as we have done in the past. But ultimately Russia will make her own destiny," Summers said. -Jonathan Nicholson; 202-862-9255

To: Steve Fancy who wrote (9517)	11/9/1998 12:48:00 PM
From: Steve Fancy	Respond to of 22640

WRAP: Markets Still Awaiting Details Of Brazil's Bailout Dow Jones Newswires BASEL -- Central bankers from the Group of 10 leading industrial nations Monday kept global markets waiting for details of an international loan package for Brazil. The package, expected to include a tranche from multilateral agencies and another from the G-10 countries, apparently still has some loose ends that need to be tied up. The loan package and Brazil's fiscal reform program "are going in the right direction" for boosting the country's economy and investors' confidence, said Hans Tietmeyer, the G-10 central bankers chairman and Deutsche Bundesbank president. But he said that decisions still need to be made on the loan package to Brazil. However, he didn't give details about what still needed to be done. He was speaking to reporters after the G-10 central bankers met at the Bank for International Settlements in Basel for their monthly session. Brazilian central bank chief Gustavo Franco met with G-10 central bankers, but he was unavailable for comment. As reported earlier Monday, Stanley Fischer, deputy managing director of the International Monetary Fund, said the IMF-led rescue package for Brazil would be made public "later this week." Officials on Friday suggested an announcement would come early this week. Fischer told reporters in Melbourne that broad details of the package have been worked out, but the full documentation has yet to be completed. International loans would shore up Brazil's official reserves, which have tumbled to around $45 billion from $67 billion at the end of August as investors have shed Brazilian investments. Reports of the potential size of the loan package have suggested amounts of up to $40 billion, with about half coming from multilateral agencies and around half from G-10 countries. Both Tietmeyer and Fischer, in their separate comments, didn't mention loan amounts, but they expressed the view that the package would restore confidence. International officials and Brazil want a credible package that would shore up the country's currency, the real. Brazilian markets have reacted positively in recent days. The Sao Paulo Stock Exchange's Bovespa Index is in the midst of a five-day rally in which it had risen about 24% through Friday. Earlier Monday, it was up another 1.6%. At 1450 GMT, the index was still in positive territory but up only about 0.26% from Friday's close. -By Dennis Baker, 41-1-212-2181

To: Steve Fancy who wrote (9517)	11/9/1998 12:49:00 PM
From: Steve Fancy	Respond to of 22640

Brazil Central Bank Policy Director Extends IMF Meetings Dow Jones Newswires BRASILIA -- Central Bank economic policy director Altamir Lopes, who was due to have returned from Washington over the weekend, will return Tuesday, a spokeswoman at the monetary authority said Monday. Lopes has been in Washington since Oct. 1 as part of a Brazilian government delegation meeting 31 with the International Monetary Fund officials. Talks with the IMF have been extended, she said, declining to comment in greater detail. "Lopes will return the same time that Central Bank President Gustavo Franco arrives from Basel, Switzerland, where he is meeting officials of the Bank for International Settlements (BID)," the spokeswoman said. Before traveling to Basel, Franco joined Lopes and his Finance Ministry counterpart, Amaury Bier, in talks with IMF executives in Washington. Brazil newspapers reported Monday morning that a letter of intent to the IMF will be signed by Finance Minister Pedro Malan Monday. The Estado news agency quoted Malan early Monday as saying that he doesn't know "if the letter of intent will be signed today (Monday)". The expected funding has been estimated at between $25 billion and $30 billion by various sources. -By William Vanvolsem; 5561-244 3095; wvanvolsem@ap.org

To: Steve Fancy who wrote (9517)	11/9/1998 12:52:00 PM
From: Steve Fancy	Respond to of 22640

Congress to vote fiscal adjustment on Wednesday São Paulo, 9 - Congress will begin to debate the fiscal adjustment Provisional Measures (MPs) related to the Welfare sector this week. Government and opposition leaders, as well as entrepreneurs, public servants and retirees, are mobilizing for the battle on Wednesday, when Congress is expected to vote on four MPs which include tough measures of public expenditures cuts. Among the MPs to be voted, there is one which increases to 20% from 11% the Welfare contribution quota charged on the public servant's wage part which exceeds R$1,200 and other which defines rules for the Union, states and municipalities retirements. (O Estado de S. Paulo/ Jornal da Tarde. Edited by Sergio Caldas)

To: Steve Fancy who wrote (9517)	11/9/1998 12:54:00 PM
From: Steve Fancy	Read Replies (5) \| Respond to of 22640

Gov't to submit budget bill to Congress today - The federal government will submit to Congress today the new version of the 1999 Union General budget, which has been adapted as a result of the financial international crisis and the Fiscal Stabilization Program (PEF) announced almost two weeks ago. Planning ministry experts concluded the proposal, which establishes no wage readjustment for public servants next year, during the weekend. According to the project, next year the Union will have revenues of R$198.7bn, while expenditures, excluding the interest rates account, should stand at some R$182.3bn. The primary surplus is estimated at R$ 16.4bn. The government expects to have the text approved by the end of the year, the ministry executive secretary, Martus Tavares, said. New projects will have resources retained and even fundamental areas will be affected. The health sector will have its budget reduced by 6.6%, while education will receive 12.3% less money. The project also predicts the GDP will shrink by 1% in 1999. In the previous proposal, written before the Russian crisis, the government expected the GDP to grow by some 4%. Tavares also said that tax collection is seen to be R$13bn lower in 1999. (O Estado de S. Paulo/ Jornal da Tarde/ Folha de S.Paulo/ Jornal do Brasil/ O Globo) Brazil could receive financial aid this month - Brazil is likely to receive part of the money of the aid package being negotiated with the International Monetary Fund (IMF) in the second half of this month. The accord is expected to be announced today or tomorrow. The amount to be released by the G-10, the group of 10 richest countries in the world, should also be disclosed today. The Brazilian government could received as much as US$40bn, but authorities still have to detail the guarantees they will offer their creditors. The package should include resources to be received by Eletrobrás and the future revenues of the electric sector privatization. (O Estado de S. Paulo/ Jornal da Tarde/ Folha de S.Paulo/ Jornal do Brasil/ O Globo) Gov't to lose R$ 16.2bn with fiscal incentive - The concession of fiscal incentive, subsidies and exemptions is seen to empty the government coffers by R$16.2bn next year. The amount is close to the R$20bn the Union expects to save with the Fiscal Stabilization Program (PEF). The 520 industries and 2,000 companies in Manaus Free Trade Zone alone will receive fiscal incentive, such as a lower Excise Tax (IPI), amounting to R$3bn. In the states, the most common concession is the Value-Added Tax (ICMS) reduction. (O Estado de S. Paulo/ Jornal da Tarde/ Jornal do Brasil) BC chairman Franco is attraction in Basel meeting - The Brazilian Central Bank chairman, Gustavo Franco, was one of the attractions yesterday, in Basel (Switzerland), in a meeting which gathered 30 representatives of the G-10 countries central banks and private banks. Since Brazil's troubles were among the main worries to be discussed in the meeting, organized by the Bank of International Settlements (BIS), Franco was invited to talk about the crisis and measures taken to solve the difficulties. Federal Reserve (US Central Bank) chairman, Alan Greenspan, and the European Central Bank chairman, Wim Duisemberg, also participated in the meeting. (O Estado de S. Paulo/ Jornal da Tarde) Brazil wastes R$12.6bn of food annually - Brazil's waste of food amounts to R$12.6bn annually, according to São Paulo state Agriculture secretary. The amount would be enough to distribute basket of basic goods monthly to 8.07 million families over a year. On the other hand, research institute Ipea data show that Brazil had 32 million inhabitants living in extreme poverty in 1993. (Folha de S.Paulo) (By Sergio Caldas)