Brazilian Credit Expansion Hits A Bump

Brazilian Credit Expansion Hits A Bump

Brazil

"Too good to be true" was the frequent echo of credit analysts visiting Brazilian companies and banks during late 2000 and early 2001, the same refrain heard in third quarter 1997 just before the Asian financial crisis. Brazil's recovery from the currency devaluation of early 1999, steady GDP growth, declining interest rates and strong optimism were dimmed only by concern about elections in late 2002. Business and banks projected unusual growth and prosperity for 2001. Questions about possible stresses were uniformly returned with confident assurances. Absolutely no one cited electricity rationing in conversations. Then, like a bolt from the heavens, rationing suddenly began occupying

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