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

To: Steve Fancy who wrote (11559)	1/13/1999 12:51:00 PM
From: Steve Fancy	Respond to of 22640

Opposition mobilizes in support to Itamar Franco São Paulo, 13 - Opposition parties, headed by PDT's national leader, Leonel Brizola, have scheduled for Monday, in Belo Horizonte (Minas Gerais), a popular movement in support to governor Itamar Franco (PMDB) and the moratorium declared last week. After a meeting yesterday, the opposition's defeated candidate for Presidency, Luiz Inácio Lula da Silva (PT), suggested that Brazil should declare international moratorium. "Whom is the current administration governing for the sake of?," Lula questioned. "For the sake of Brazil, the wealthy countries or the IMF?," he insisted. The opposition expects to receive support from labor union umbrella groups CUT and CGT, as well as from the Rural Landless Workers Movement (MST) and politicians. (O Estado de S. Paulo/ Jornal da Tarde/ Folha de S.Paulo)

To: Steve Fancy who wrote (11559)	1/13/1999 12:52:00 PM
From: Steve Fancy	Respond to of 22640

Forex posts a US$917.8m deficit on Tuesday São Paulo, 13 - The Brazilian foreign exchange market posted a US$917.890 on Tuesday, the highest figure of the year so far. Financial inflow in the commercial dollar segment reached US$128.483m, well below outflow which stood at US$962.971m. In the trade account, exports reached US$97.195m, against imports of US$180.597m. The floating dollar posted a deficit of US$1.213m yesterday. (By Lucinda Pinto)

To: Steve Fancy who wrote (11559)	1/13/1999 12:53:00 PM
From: Steve Fancy	Respond to of 22640

Forex posts a US$917.8m deficit on Tuesday São Paulo, 13 - The Brazilian foreign exchange market posted a US$917.890 on Tuesday, the highest figure of the year so far. Financial inflow in the commercial dollar segment reached US$128.483m, well below outflow which stood at US$962.971m. In the trade account, exports reached US$97.195m, against imports of US$180.597m. The floating dollar posted a deficit of US$1.213m yesterday. (By Lucinda Pinto)

To: Steve Fancy who wrote (11559)	1/13/1999 12:56:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Brazil's New Central Bank Head Vows New Trading Band Will Hold Brazil's Central Bank Head Vows Trading Band to Hold (Update1) (Updates with more comments from Lopes) Brasilia, Brazil, Jan. 13 (Bloomberg) -- Brazil's new central bank president, Francisco Lopes, said he will maintain the new currency trading band to discourage further speculation against the real. ''We have almost $45 billion in reserves and we are willing to use these resources and raise interest rates to defend our foreign exchange regime,'' said Lopes at a press conference this morning. Lopes, 53, took over from Gustavo Franco, who resigned after the government opted to accelerate the pace of devaluation. Franco has been criticized by business leaders for defending the currency, at the cost of depleted reserves and high interest rates. Lopes said Brazil has more than $70 billion on hand to defend the currency, including the $41.5 billion in aid from the International Monetary Fund and other lenders, along with about $35 billion in Brazil's own reserves. In his first day in command of the central bank, Lopes, a Harvard University graduate and former central bank director of monetary policy, faced his first challenge as stocks plunged and the real devalued past the limits of the newly-set trading band. Economists said the bank may have trouble maintaining the band, after the currency weakened 8.8 percent today, more than in all of 1998. ''We need to see if capital flight continues or not,'' said Ashok Shah, head of emerging market equities at Old Mutual Asset Managers, which has 45.7 billion pounds under management. ''It's quite likely that with a fixed range devaluation it means the market will smell blood and go for a further devaluation.'' Rising Budget Deficit Lopes said investor confidence will be restored as the government takes steps to bring down its $64 billion budget deficit. Stocks rebounded from a 10 percent drop, with the benchmark index down 3 percent. ''Markets are nervous now trying to understand the new policy,'' said Lopes. ''The sustainability of this policy will show itself as dollar flows normalize but will ultimately depend on the country's efforts to implement a fiscal adjustment.'' Lopes downplayed the importance of today's change in foreign exchange policy, under which the real will float more freely against the dollar, trading in a wide currency band, with 10 percentage points from top to bottom. The inner trading band was removed. ''We think it is better to have a less and less government intervention in the foreign exchange market,'' he said. ''The central bank has a very strong record of very tight monetary policy. We are very explicitly committed to keep a very tight monetary policy.'' He said the real should devalue about 12 percent or 15 percent this year, after losing almost 9 percent today alone. ''This policy should not be understood as a break from the past. It's an improvement. It's not by itself a panacea.'' Rates to Fall He said rates should decline, after a short-term increase. ''We will increase interest rates in the short turn if it is necessary. ''The basis for stability is to have solid fiscal fundamentals. We're very optimistic about that. We're very optimistic that in the next few months we will have the program implemented.'' The central bank adjusted the ceiling of its trading band to 1.32 reais today, from 1.22 reais, speeding the yearly devaluation of the currency, widening the band in which the real trades. Lopes said Brazil can still meet the budget deficit targets set by the International Monetary Fund as part of a $41.5 billion aid package. These include a cut in the budget deficit to a level equal to 4.7 percent of gross domestic product this year, from 8 percent. Still, he said a new foreign exchange system wasn't included in the IMF agreement, and will have to be discussed with IMF officials. -------------------------------------------------------------------------------- © Copyright 1998, Bloomberg L.P. All Rights Reserved. latinvestor.com