IMF to Grant 30 Billion Dollars to Brazil

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Last updated at: (Beijing Time) Thursday, August 08, 2002

IMF to Grant 30 Billion Dollars to Brazil

The International Monetary Fund (IMF) Wednesday announced a financial assistance agreement amounting to 30 billion US dollars.

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The International Monetary Fund (IMF) Wednesday announced a financial assistance agreement amounting to 30 billion US dollars.

Out of this total, 6 billion dollars will be granted within this year,still during the present administration of President Fernando H. Cardoso.

The remaining 24 billion will be disembursed in 2003, under the administration of the new president to be elected next October.

The 15-month agreement considers a more drastic fiscal adjustment than the present one, for the primary 3.5 percent surplus in the gross domestic product (GDP) will grow to 3.75 percent of the GDP, in accordance with the compromise with the Brazilian government.

With the money saved in the primary surplus of the public sector, the Brazilian government pays the interest rates of its debts.

This is the third agreement with IMF during the Cardoso administration.

The other two agreements were signed in November 1998, after the worsening of the Russian crisis, and in September 2001, in face of international market turbulence, the terrorist attack of September 11 in United States and the deepening of the Argentine crisis.

Some analysts predicted that the agreement with the multilateral institution will bring calm to financial markets and lower the price of the US dollar even more in the coming days.

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