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SAO PAULO, JAN 30: Brazilians lined up at banks to withdraw their money as rumours swept the nation that government planned to freeze savings accounts as part of new financial shock measures.
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.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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