Brazil Gets $11 Billion Boost
The International Monetary Fund agreed in mid-June to lend
Brazil $10 billion and the World Bank chipped in another $1
billion to help the country stabilize its volatile currency and
bond markets. Investors dumped Brazilian assets in reaction to
the rise in opinion polls of Luis Inácio Lula da Silva,
the Workers Party presidential candidate. The government plans
to draw the funds from a $15 billion IMF credit line it secured
last September and will use the money to buy back about $3
billion of bonds due in 2003 and 2004. During the first six
months of this year, the Brazilian real weakened 15% against
the dollar and in the second quarter, its benchmark 8% bond
maturing 2014 fell to 68 cents on the dollar from 83 cents in
March. Yields on Brazilian bonds averaged about 1,200 basis
points above comparable US Treasurys. Investors...
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.