Armínio Fraga has saved Brazil from calamity twice since he took
over as central bank governor early in 1999. When Argentina's
financial crisis began intensifying last year, he and his team at
the central bank were ready. By May 2001, Brazil had already raised
three-quarters of the $6.68 billion in financing it would get from
the international markets in 2001. The central bank's official
reserves were well stocked at $37.23 billion. Under Fraga, the
central bank moved interest rates up 375 basis points at the
beginning of the year.
Brazil had a rough ride last year as the Argentine crisis
deepened. The economy sputtered but did not stop growing, in spite
of power shortages and a weakening global economy. The September
11th attacks in the US further pummeled the Brazilian economy and
10 days later, the real hit an historic low of R$2.80 per dollar.
Yet, by the end of...
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