News Brief: IMF Completes Third Review of Stand-By Arrangement with Brazil

Brazil and the IMF

Country's Policy Intentions Documents

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile

BrazilLetter of Intent

Brasilia, June 14, 2002

The following item is a Letter of Intent of the government of Brazil, which describes the policies that Brazil intends to implement in the context of its request for financial support from the IMF. The document, which is the property of Brazil, is being made available on the IMF website by agreement with the member as a service to users of the IMF website.

Dear Mr. Köhler:

Following our letter of June 5, 2002 and the attached Memorandum of Economic Policies (MEP) and Technical Memorandum Understanding for the Third Review of Brazil's Stand-By Arrangement, we are writing to inform you that the government has decided to strengthen its economic program for 2002 in order to address the recent turbulence in financial markets regarding Brazil. For this purpose, the primary surplus target for the consolidated public sector is being raised from 3.5 percent of GDP to 3.75 percent of GDP in 2002.

In addition, the government plans to carry out a debt buyback of external sovereign bonds falling due in 2003 and 2004 for an amount equivalent up to about US$3 billion. Brazil intends to draw from the IMF the resources that will be available after the completion of the Third Review, and we would like to request that the performance criterion on the net international reserve floor be reduced from the current US$20 billion to US$15 billion for the remainder of the arrangement. This would facilitate the buy back of sovereign external debt.

We look forward to maintaining the usual close and constructive policy dialogue with the Fund on macroeconomic policies in line with the previous understandings.

Yours sincerely,


Pedro Sampaio Malán
Minister of Finance



Arminio Fraga Neto
President of the Central Bank of Brazil