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

To: Steve Fancy who wrote (11979)	1/18/1999 8:34:00 PM
From: John Soileau	Read Replies (1) \| Respond to of 22640

He is not just an embarrassment to Brazilians, he is an embarrassment to humans. And his jokes are not funny. John

To: Steve Fancy who wrote (11979)	1/18/1999 11:09:00 PM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Tue, 19 Jan 1999, 2:06am EDT Brazil Raises Rates 41% for Overnight Bank Loans to Stem Real Speculation Brazil Raises Interest Rates for Overnight Bank Loans (Correct) (Corrects weakening in real to 23 percent in 6th paragraph.) Brasilia, Brazil, Jan. 18 (Bloomberg) -- The central bank raised the interest rates it lends to banks for overnight loans in a bid to keep the Brazilian currency from weakening further. The bank raised to 41 percent from 36 percent the so-called TBAN rate, which is used for overnight loans. The bank also set the interbank rate, which is used for intraday loans among banks, at between 24.75 percent and 41 percent. The interbank rate will be set daily by central bank operations in the money markets, and on March 3 the central bank will review its rates. The bank opted for higher rates to make it more expensive for banks to speculate against the currency. The bank said it won't use the TBC rate, which in the past was the minimum rate it would loan money to banks that need to settle overnight obligations. The TBC could be reactivated when policy-makers meet March 3. The central bank said the intrabank rate known as the Selic will wary in a band that is 16.25 percentage points wide, or the range it set for intraday loans. The unscheduled meeting of policy-makers comes after the bank decided to let the Brazilian currency to trade freely, a move that has weakened the real 23 percent in less than a week. The committee usually meets about every five weeks, and last met Dec. 16, when it cut the benchmark lending rate to 29 percent, from 32 percent. Finance Minister Pedro Malan, who met today in Washington with U.S. Federal Reserve Chairman Alan Greenspan and Deputy U.S. Treasury Secretary Lawrence Summers, said interest rates would fall with the free floating currency. He also said the government may widen the difference between its peak and minimum interest rates to ''allow for a more active use of interest rate policy.'' Brazil's government last changed key interest rates on Dec. 16, when it cut the minimum rate paid by commercial banks for certain loans from the central bank to 29 percent from 32 percent and reduced the maximum lending rate to 36 percent from 42.25 percent. Brazil may have more freedom to reduce interest rates now that it has weakened the currency, Malan said. Interest rates had to remain high before the government eliminated its controlled devaluation policy because investors were concerned about devaluation risk. Rates won't come down, however, unless Brazil's congress passes key measures to plug a budget deficit, Malan said. Interest rate cuts will be ''gradual'' and won't happen right away, he said. -------------------------------------------------------------------------------- © Copyright 1999, Bloomberg L.P. All Rights Reserved.