O Globo reported (11.5.91) that Brazil's international reserve had fallen to a "critical" US$ 6.3 billions by mid-October 1991. The Central Bank regularly delays publication of statistics on the level of reserves, because considered "strategic information". The Bank's secretive policy, however, is nothing new. Recently, the Bank added to its secretiveness by banning the release of any information on operations with foreign exchange.
Among the new indexation measures hinted at by Economic Minister Marcflio Marques Moreira in 1991 was the issue of a new government bond linked to the quotation of the U.S. dollar. Soon after this "hint", Moreira saw better to reject Argentine President Carlos Menem's proposal that both their economies be "dollarized". Political Economy Secretary Roberto Macedo stated that, at the moment, Brazil had better strengthen the cruzeiro. Soon the cruzeiro continued to slip on the official market to Cr$ 697.5 per U.S. dollar. The Central Bank then stopped intervention in the exchange market on 30 October 1991, after the parallel dollar rate had shot up briefly beyond the 1,000 cruzeiro mark. The official rate went from Cr$ 622 to Cr$ 653 in a week. There were speculations that the Government was letting the crisis deepen for other reasons than an eventual dollarization. On April 5, 1992, the cruzeiro was quoted on the U.S. market at Cr$ 1,605 per U.S. dollar, i.e. each cruzeiro was worth US$ 0.0006.
On 30 April 1991, the World Bank announced it was granting Brazil a US$ 310 M loan to help finance the modernization of the country's road network. The loan was repayable over 15 years and bore a variable interest rate (Latin American Report, 16 May 1991).
In the wake of the U.S.'s attempts at creating a North American Common Market, Argentine, Uruguay, Paraguay, and Brazil signed their MERCOSUR Treaty in March 1990. The Treaty aspires at uniting its four members in a full common market behind a comm...
History of Brazil. (1969, December 31). In LotsofEssays.com. Retrieved 02:08, December 22, 2014, from http://www.collegetermpapers.com/viewpaper/1303689682.html