The new Managing Director of the International Monetary Fund (IMF), Rodrigo Rato, arrived today in Brazil to meet with the Minister of Finance, Antônio Palocci. However, the Fund’s Latin American Affairs Secretary, Francisco Baker, disclosed that Rato’s visit is not for the purpose of negotiations.
“There is nothing on his agenda involving renegotiation of the debt or approval of emergency loans,” Baker informed. Brazil is Rato’s last stop on a South American trip including previous stopovers in Uruguay, Argentina, and China.
Baker affirmed that Rato came to South America to “get to know the people with whom he is dealing.”
Rato’s visit aroused expectations about new agreements between the Brazilian government and the IMF. Something like what happened at the end of 2003, when the Fund established a US$ 14 billion stand-by credit line for Brazil in case of bumpy economic weather.
At the same time, the IMF agreed to extend the payment period on Brazil’s debt to the institution. The Brazilian government was worried about a US$ 12 billion installment due in 2005. Of this total, US$ 5.5 billion was rescheduled for payment in 2007.
Rato, who was Spanish Minister of the Economy, replaced Horst Kí¶hler, from Germany, on the board of the IMF. Kí¶hler resigned in March to run for President in his home country.
The new IMF Managing Director received the support of Brazil and 14 other Latin American countries to be named to the post.