http://www.boston.com/dailynews/106/world/Brazil_currency_drops_to_lowes:.shtml

Brazil currency drops to lowest ever

By Associated Press, 4/16/2001 19:15

SAO PAULO, Brazil (AP) The specter of a currency devaluation in neighboring Argentina and corruption allegations against the President of Brazil's Senate pushed the Brazilian real to its lowest point ever against the dollar Monday.

The real closed at 2.196 to the dollar, the weakest finish ever for the currency that was created in mid-1994 as part of an economic stabilization plan that put an end to triple digit inflation. For a few months after it was launched, the real was worth more than the dollar.

The Sao Paulo Stock Exchange closed down 3.5 percent with brokers blaming the same factors pressuring the currency.

On Saturday, Argentine Finance Minister Domingo Cavallo unveiled a plan under which the country would abandon its parity to the U.S. dollar pegging it instead to a basket of several major currencies.

''This smells like devaluation to me,'' said one Rio de Janeiro trader who blamed the sell off on investors seeking coverage from regional turbulence.

Also Monday, Senate President Jader Barbalho defended himself on the Senate floor against widening charges that he was involved in a corruption scheme that may have bilked tax payers out of as much as 2 billion reals ($920 million), further fueling uncertainty of the future of political and economic reforms in Brazil.

-- Anonymous, April 17, 2001