The freeze could be part of a $16 billion austerity package intended to restore confidence in the South American giant's faltering economy. ``The total value could be of some $16 billion, and could include a new agreement with the IMF to disburse $9 billion right away,'' said Pedro Tomasoni of Lloyd's bank. But president Fernando Henrique Cardoso was quick to deny the reports.

``We are not thinking of any plan that has anything to do with people's savings,'' the president said after a meeting with the governor of Sao Paulo state yesterday.

``These bank line-ups make no sense,'' Cardoso said. ``The people who are withdrawing their money today will bring it back is going to happen.'' Meanwhile Brazilian real plunged past a key psychological barrier of two to the dollar amid speculation over the government's newausterity measures.The real eased to 2.07-2.10 per dollar from 1.93-1.95 late yesterday. Real's continued decline came despite the central bank's move to again raise the interbank rate yesterday to a credit-crunching 37 per cent.