Brazil Saves US$ 900 Million by Paying IMF Ahead of Schedule

Brazil, tapping into a surge in its foreign reserves, will pay back before year-end the remaining US$ 15.5 billion it owes the International Monetary Fund.

The Brazilian Central Bank was scheduled to make the payments in 2006 and 2007 and will save US$ 900 million in interest costs by paying ahead of schedule, Finance Minister Antonio Palocci said. Repayment would leave Brazil free of debt with the International Monetary Fund for the first time since at least 1984.

"This will allow us to save a lot of money," Palocci said at a news conference at the Sofitel Hotel in São Paulo, in southeastern Brazil. "We can do this because of the significant growth in our international reserves and the improvement in our external accounts."

Brazil’s currency fell after the announcement, reversing earlier gains, as investors bet the central bank will keep buying dollars in the foreign-exchange market to rebuild the foreign reserves it will spend in the transaction, said Ivan Dumont Silva, a trader at Banco Alfa de Investimento.

"What may happen now is that the central bank will keep on buying dollars for a longer period of time to rebuild reserves," Silva said in a telephone interview from São Paulo. "There’s more to be rebuilt now."

Brazil’s foreign reserves jumped to US$ 67 billion from US$ 50 billion a year earlier as the central bank bought dollars amid a climb to record highs in exports and an increase in foreign investment in the fixed-income market.

Brazil, Latin America’s biggest economy, has taken out several loans with the IMF in recent years, including accords in 1998 and 2002 as the government sought to ease investor concern that the country would devalue its currency and default on its debt.

Brazil has had an outstanding loan balance with the IMF at the end of every year since 1984 – as far back as the IMF Web site shows.

This article appeared originally in Mercopress – www.mercopress.com.

Tags:

You May Also Like

Minus 2.83%: Brazilian Stocks Fall for a Second Day

São Paulo’s Stock Exchange (Bovespa) continued on Thursday the decline it had started the ...

First Woman Justice in Brazil Has Confederate Ancestors

Justices on the Brazilian Supreme Court get to the court in much the same ...

Brazil Is Celebrating: The Country Is Importing More

Brazil has imported the equivalent to US$ 49.457 billion from January to the fourth ...

Brazil’s Development Bank Doubles Energy Financing to US$ 4.3 Billion

Financing by the Brazilian Development Bank (BNDES) for the energy sector totaled 8.3 billion ...

Editorial Applauds Brazil’s Rejection of US Money for AIDS

Brazil’s rejection of US$ 40 million in US AIDS grants because of a Bush ...

World Social Forum Back in Brazil and Ready for Change

Representatives of the Organizing Committee of the World Social Forum (WSF) met yesterday, November ...

Egypt Media Giant Al Ahram Wants to Invest in Brazil

Al Ahram group, the largest media group in Egypt, is studying the possibility of ...

Brazil Uses Public Bonds to Fund US$ 6 Billion Sovereign Fund

Brazil's Sovereign Fund (FSB) should be established, initially, using money from public bonds to ...

To Brazil’s Lula, Landless Have No Need to Complain

Brazilian President Luiz Inácio Lula da Silva took advantage of the International Labor Day ...

Stocks Go South in Brazil With Foreigners Redirecting Money to US

Brazilian stocks  sank into the red today, as investors reacted to a continued drop ...

WordPress database error: [Table './brazzil3_live/wp_wfHits' is marked as crashed and last (automatic?) repair failed]
SHOW FULL COLUMNS FROM `wp_wfHits`