Brazil Repays Early US$ 2.6 Billion Debt With Paris Club and Saves US$ 100 Million

Brazil will pay off a US$ 2.6 billion debt with the Paris Club in January. This is a debt that was contracted in 1983 and was to have been paid off by December 2006 in three installments of US$ 860 million in January 2006, June 2006 and December 2006.

This is the second anticipation of a debt payment Brazil has made this month. It recently paid off US$ 15.5 billion to the International Monetary Fund.

According to the head of the secretariat of the National Treasury (Tesouro Nacional), Joaquim Levy, Brazil’s "healthy economy" and solid foreign accounts are making it possible to anticipate debt payments. The anticipation will represent an economy of US$ 100 million for Brazil.

Brazilian Minister of Finance, Antonio Palocci, announced earlier this month that Brazil was anticipating the payment of an International Monetary Fund loan of US$ 15.5 billion, which would mean an economy of around US$ 900 million in interest payments. The loan was to have been paid off in installments ending in December 2007.

Palocci pointed out that whereas the country’s total reserves were US$ 15 billion in 2003, today the country has US$ 51 billion, above the IMF loan amount, so the payment will not have a negative effect on its international reserves.

For Brazilian President Luiz Inácio Lula da Silva, the decision to anticipate paying off the IMF debt shows that Brazil can control its own destiny.

"We are making this payment because we want to show the world and the market that we are in charge. When we do things we might make mistakes or we might get things right, but we decide," said the President.

ABr

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  • Guest

    Lula must go ahead
    Lula has been in government for just 3 years and has already suceeded to reinsert Brazil in the way of development. INFLATION is well controlled in a 5% year rate; EMPLOYMENT rate is rising up slowly, but regularly ”“ 4,5 million new jobs has already been created by Lula’s Government; FOREIGN DEBT being honored and corresponds now to 1.4 times the country’s GDP, 3 years ago it was as high as 4.4 times the GDP! ”“ also the country has fully repaid IMF in advance; FOREIGN TRADE performing exceptional results – in 2005 hit an astonishing US$44 billion trade surplus; Healthy INTERNATIONAL RESERVES valued U$57 – the highest ever registered; FISCAL POLICY is highly responsible, recording annual surplus of 5.28% in the domestic accounts, pushing down the domestic debt.
    Besides the optimistic economical figures, the social policy in Brazil has being effective and its results also starts to show up: for the first time in Brazilian statistical historical series the income difference between richest and poorest population started to decrease. They both are becoming healthier, but the poor stepping faster than rich.
    For all these reasons the risk for investment in Brazil is sharply falling down and now it ranks about 300 – close to the long ago wanted investment grade premium.
    The present government in Brazil is a responsible and development oriented Government, that’s why all the Brazilian people will re-elected LULA president in 2006!!!!

  • Guest

    and Lula decides…..
    – when and how the government is doing vote buying.
    – that corruption is not illegal, when done by official government people or congressmen/senators.
    – that providing 1 % of government budget to Bolsa Familia is… very generous !
    – that subsiding heavily your industries are normal, but not when other nations subsidy their industries.

    What is lacking you the most, Mr President, is honesty, consistency, transparency.

    Your only consistency has been lies, trunked numbers and fallacies to your own contradictory public and official speeches.

    You are not a man of trust but a man full of dirty tricks.

    Your own success at any price at whatever cost has been the motto you followed since your youth.

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