BRAZIL WARNS CREDITORS AGAINST RETALIATION
Central Bank president Francisco
Gros said possible retaliation by Brazil's creditors would not
be an intelligent measure because it would affect both sides.
    "If our creditors considered retaliation, Brazil would lose
its capacity to export, thus would never be able to pay its
debt," Gros said in a news conference.
    Gros said that during their 12-day globe-trotting tour of
several countries, he and Finance Minister Dilson Funaro warned
creditors that Brazil could no longer continue representing the
role of merely an exporter of capital.
    "We made it very clear to our creditors that we must find
other means to pay our debt. We told them we wish to pay but
that first we must make sure that the country grows," Gros said.
    "We pointed out to them that in the last two years Brazil
paid 24 billion dlrs just in interest rates, while only
receiving two billion dlrs in new loans over a similar period."
Gros reiterated that Brazil will not accept interference from
the International Monetary Fund (IMF), as creditors suggested.
    "The performance of the IMF over the years has not been
convenient to our needs. It is an important institution, but we
do not accept it to monitor our economy," he said.
    "The banks would welcome us going to the IMF. We would
welcome if they pardoned half our debt," Gros said.
    Brazil announced suspension of interest payment of 68
billion dlrs owed to commercial foreign banks on February 20.
No deadline was established for the renewal of the payment.
    "Our major commitment is with the country's growth.
Therefore, we need more money to invest on new projects," Gros
said.  He said that before the announcement of the suspension
of interest payment, Brazil was paying about 500 mln dlrs a
month to its commercial foreign creditors.
    "We can say that at least we are saving some money," he said.
    Gros said Brazil has not submitted specific proposals to
creditors, and instead hopes that proposals would come through
bilateral negotiations.
    The Central Bank president said he will be going next week
to Washington to take part in a meeting of the Inter American
Development Bank .
    In Brasilia, sources linked to the Presidency said Brazil
was preparing a new program of economic readjustment to
strengthen its negotiations on its 109 billion dlr foreign
debt. The sources said the new program could be announced by
the end of the month and calls basically for preservation of
the country's growth.               
 Reuter
