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:

  • Show Comments (1)

  • Guest

    Now it is 900mil
    Just look at my earlyest argument about the 160Mil.

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Balance of Rio’s One-Day Drug War: One Arrested, 12 Killed

Rio de Janeiro has said no to an offer by the Brazilian federal government ...

At Midnight, You Will Be One Hour Farther from Brazil

Clocks in Brazil should be set forward an hour at midnight tonight, in the ...

Venezuela Not Ready for Prime Time in a Mercosur Dominated by Brazil

Venezuela’s July 4 official accession to the Mercado Común del Sur (Mercosur), of which ...

Brazilian Woman Maimed by Husband Gets Little Justice 25 Years Later

The city of Fortaleza, in the state of Ceará, northeastearn Brazil; the year is ...

Brazil Hosts Local Development Expo

Representatives of Brazil, Chile, Spain, Portugal, Mozambique, Guinea-Bissau, and Cape Verde, together with international ...

Ex-Treasury Secretary in Brazil Punches and Kicks Journalist after Incriminating Report

The Brazilian Association of Investigative Journalism has informed that on October 21, 2009, Brazilian ...

Brazil Analysts Lower Direct Foreign Investment Forecast to US$ 35 Billion

Brazilian financial market analysts have once again raised their forecast for 2010 GDP growth, ...

Brazil’s NGOs Against Privatizing Water

This month around 80 Brazilian non-governmental organizations launched a platform defending everyone’s right to ...

Alliant Energy Settles in Brazilian Arbitration

Alliant Energy Corporation, announced today the settlement of an arbitration award the company received ...

Brazil Back to the Top of World’s Highest Interest Rate, at 9.50%

Copom, Brazil’s Monetary Policy Committee, linked to the Central Bank (Brazil’s Fed), decided to ...