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MARKET SAVVY | SAVVY CONFIDENTIAL / A Briefing for
Investors

Brazilian Rates Decline Again

April 29, 1999|Bloomberg News, Times Staff

Brazil cut interest rates Wednesday--the fourth cut in a little over a month--in a bid to pull Latin America's biggest economy out of recession and ease its swelling debt burden.

Citing Brazilian companies' growing success in rolling over their debt, as well as "excellent news" in keeping inflation under control, Central Bank President Arminio Fraga announced a cut in the target overnight lending rate to 32% from 34%.

Brazil's main stock index, the Bovespa, jumped 2.2% to 11,127 in anticipation of the cut. It is up 64% this year in native currency terms.

Brazil's currency devaluation in January has triggered recession, but the country is handling the pain far better than expected, many experts say.

The Brazil Fund, a closed-end investment fund that trades on the New York Stock Exchange, edged up 25 cents to $14.63 on Wednesday. It has jumped 34% so far this year--a smaller gain than the Brazilian market, in part reflecting the effects of the devaluation.

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