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...
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