August 3, 2001
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Horst Köhler, Managing Director of the International Monetary Fund (IMF), today announced that IMF Management intends to recommend to the Executive Board the approval of a new stand-by arrangement for Brazil for the period through December 2002. Management will recommend approximately US$ 15 billion, or 400 percent of quota, be made available to Brazil under this new arrangement. Of this total, about US$ 12.5 billion would be provided under the Supplemental Reserve Facility. The authorities have indicated that they intend to treat the arrangement as precautionary.
The Executive Board is expected to consider Brazil's request for this support in September 2001, and the first tranche of about US$ 4.6 billion would be available upon approval of the new program by the Board.
The Brazilian authorities will announce in Brasilia next week the policy measures associated with the new program.
"The Brazilian authorities are strengthening fiscal and monetary policies and implementing their structural reform agenda in the face of a difficult external environment. In light of Brazil's strong track record, and the strengthened measures it plans to implement under the program, I am prepared to recommend this new program to the IMF's Executive Board," Mr. Köhler said.
