Amadeusz Juskowiak

Funaro says brazil needs more faster finance

Brazil would not have suspended payments on debt owed to foreign banks if it had received more and faster financing from official lending agencies Finance Minister Dilson Funaro said

He said he would not seek more money from the International Monetary Fund to which Brazil paid 922 mln dlrs last year and said Brazils problems could not be solved by IMF intervention

Its a question of why the official lending agencies dont finance a little bit more quickly and easily Funaro told reporters at the Brazilian Embassy

Asked if Brazil would have continued making payments of monthly interest to its foreign commercial bank lenders if official lending agencies had provided more funds he replied Yes because our country did not receive financing from these agencies

Asked how long the payment suspension would last Funaro said It all depends on what kind of financing we are going to receive from the other side

Brazil with foreign debt totaling 108 billion dlrs stunned the banking community last week by suspending payments on some 68 billion dlrs owed to private banks

Funaro said Brazil had paid 44 billion dollars to the World Bank and other lending agencies and commercial banks in the past four years and got only 11 billion dlrs in loans

He said the net transfer was hurting the countrys continued growth and capacity to import goods

Something is wrong with the system Some mechanism has to be found to finance a country like Brazil Funaro said

He did not specify what steps he had in mind but said he would like to see automatic official lending when needed so that Brazil would not have to dip into its dwindling reserves now reported to be below four billion dlrs

Funaro said Brazil had the worlds thirdlargest trade surplus and estimated the 1987 surplus would be at least eight billion dlrs

But he said that without increased and faster lending from official institutions the nation could not rely on its export earnings to finance development and imports and also service its debt

We must find an equilibrium between foreign adjustment and internal adjustment Funaro said

He complained that official lending agencies had imposed tight control on credit over the past four years leaving commercial bank refinancing as the only credit available

Funaro said US officials understand his position but they dont like it Later he left Washington for a tour of Europe and debt discussions with officials in Britain West Germany France Switzerland and Italy

Brazils central cank President Francisco Gros said he sent a telex to creditor banks Friday to clarify confusion over Brazils request that banks expedite procedures for renewal of shortterm interbank credit and trade credit lines