Brazil's Central Bank Makes Two Emergency Bond Sales to Prop Up Sliding Real

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Mar 19, 2001 - 06:50 PM

Brazil's Central Bank Makes Two Emergency Bond Sales to Prop Up Sliding Real The Associated Press

SAM PAULO, Brazil (AP) - As the Brazilian real headed toward an all-time low against the dollar Monday, the Central Bank rushed to prop up the sliding currency by selling two lots of dollar-indexef bonds in emergency auctions. Dragged down by the ongoing economic crisis in neighboring Argentina, the real slumped to 2.176 to the dollar.

The currency was headed for a record low closing when the Central Bank intervened with the auctions, each worth $940 million, or 2 billion reals.

The first sale of some $437 million (950 million reals) of dollar-indexed bonds brought the real back to 2.119 against the dollar.

But only a tiny portion of the second lot of bonds was sold and thg Central Bank said it would hold a third emergency auction Tuesday.

The real, a currency which has brought price stability and economic growth to Brazil since its introduction in 1994, is slipping on concerns that Argentina's austerity program, unveiled Friday, might not make it through Congress.

That would be another blow to Argentina's battered economy, lingering in recession for its third year.

Negative market sentiment over Argentina invariably spills over into Brazil, its main trafing partner.

AP-ES-03-19-01 1849EST

http://ap.tbo.com/ap/breaking/MGASAFUUIKC.html

-- Carl Jenkins (somewherepress@aol.com), March 19, 2001


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