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: Bob Howarth who wrote (12221)	1/22/1999 9:55:00 AM
From: Steve Fancy	Respond to of 22640

Brazil forex mkts lost net $411 mln Thurs -traders Reuters, Friday, January 22, 1999 at 07:53 SAO PAULO, Jan 22 (Reuters) - Brazil lost $411 million through its currency markets on Thursday, up from a net $334 million on Wednesday, amid speculation the local real currency would slide further, traders said on Friday. A net $314 million fled the commercial forex market, while a net $97 million escaped the floating currency market. With Thursday's outflows, Brazil's forex markets had accumulated a net dollar outflow of $6.905 billion so far this month, after a net $5.16 billion was pulled out in December. The real plunged 7.6 percent on Thursday to close at an all-time low of 1.72 reais to the dollar as forex traders claimed their dollar stocks were becoming scarce amid an absence of Central Bank intervention. The Central Bank used to sell dollars in currency markets, supplying dollars and supporting the real, before it free-floated the currency one week ago. Under the new forex policy, the Bank said it would only intervene in the market "occasionally and in a limited fashion" to avoid abrupt movements. The Bank appeared to bow to pressure from markets on Friday, stepping in for the first time since the flotation and supplying dollars via federal bank Banco do Brasil, traders said. Copyright 1999, Reuters News Service

To: Bob Howarth who wrote (12221)	1/22/1999 9:57:00 AM
From: Steve Fancy	Read Replies (8) \| Respond to of 22640

Brazil's real falls back to 1.72/dlr - traders Reuters, Friday, January 22, 1999 at 07:45 SAO PAULO, Jan 22 (Reuters) - Brazil's real currency swung back to 1.72 reais per dollar in volatile trade by mid-morning on Friday, after it earlier firmed on what traders said was Central Bank intervention. The real was trading at Thursday's closing level of 1.72 per dollar by mid-morning, after it opened weaker at 1.74 reais and temporarily firmed to 1.65 reais following indirect dollar sales by the Central Bank, traders said. It was the first time the Central Bank had intervened in the market to support the real after the currency was floated one week ago. The Central Bank stepped into the market via federal bank Banco do Brasil, traders said. The Central Bank said it had no comment on the intervention reports. Market players had been waiting for the Central Bank to supply dollars after net outflows exceeding $400 million left the market on Thursday, depleting stocks of the U.S. currency. Currency traders had also been anxious to see at what exchange rate the Central Bank would step into the market, after the Bank announced early this week it would intervene "occasionally and in a limited fashion." Copyright 1999, Reuters News Service

To: Bob Howarth who wrote (12221)	1/22/1999 10:05:00 AM
From: Steve Fancy	Read Replies (1) \| Respond to of 22640

Japan Sakakibara warns of financial meltdown Reuters, Friday, January 22, 1999 at 05:34 By Edwina Gibbs TOKYO, Jan 22 (Reuters) - Japan's top financial diplomat Eisuke Sakakibara warned on Friday that without reform of the international finance system, the world risked a major financial meltdown. "I hope that in the next 10 to 20 years we could avoid both depressions and war, but there is a definite risk of world financial collapse. For that reason, reform of the international financial architecture is so important," he told a luncheon gathering with foreign journalists. Sakakibara said he was not preaching against market forces or market mechanisms but was against a U.S.-led "market fundamentalism," where he said market forces tended to be left unchecked without question. In particular he attacked the International Monetary Fund's policy prescriptions for countries in financial turmoil, saying that, for example, the imposition of high interest rates in Indonesia had not been a good idea. Crisis after crisis could result in a major meltdown of the world financial system, he said, but added that he thought such a meltdown could be avoided. To that end, a mechanism to stabilise financial markets was needed, he said. He also challenged economists that say currency depreciation would eventually restore market equilibrium in crisis-hit nations and said that in many cases, such a move had led a freefall in the exchange rate. "I am very interested to observe what will happen to Brazil in the coming weeks," he added. Brazil, plunged into crisis by a huge loss in investor confidence over worries about its fiscal reform plans, announced on Monday that it would it float its currency. As of Thursday, the real had dived 30 percent since last week. Sakakibara, Japan's vice finance minister for international affairs, also said floating an exchange rate in a crisis could lead to a collapse of foreign exchange transactions and the same applied to letting interest rates rise to defend exchange rates. His speech followed one by Finance Minister Kiichi Miyazawa in December where Miyazawa called for "managed flexibility" between the yen, the euro and the U.S. dollar, which has been interpreted by some as suggesting currency target zones. But Sakakibara said Japan did not necessarily support the idea. "We will certainly discuss this...but at this moment our position is not that of support for target zones," he said. Sakakibara said authorities needed to approach markets with the aim of enhancing competition and not the promotion of unlimited freedom. "Global capitalism needs to be restrained in its cross-border transactions, be it through disclosure, supervisory and prudential regulations, or outright controls," he said. He called for "systemic diversity" in the world's financial system that respected social and political differences. Sakakibara also predicted that what he called the regime of laissez faire or market fundamentalism dominated by the United States in the 1980s and 1990s would not continue into the 21st century. U.S. dominance, political and economic, was declining, he said, citing the unification of Europe and instability in global capitalism. But he acknowledged that a waning of U.S. influence could reduce the degree of coordination between nations that currently exists. tokyo.newsroom@reuters.com)) Copyright 1999, Reuters News Service