Can a similar crisis be avoided in the future and what actions can prevent or mitigate such a crisis? 22
What lessons from this crisis can others learn so the same problem does not occur? 22
Appendix 1: Inflation In Brazil 24
Appendix 2: Brazil’s Fiscal Deficit 24
Appendix 3: Brazil’s Exchange Rate Band 25
This report deals with the 1999 Brazilian currency crisis by examining the causes, what happened during the crisis and what lessons can be taken away from this situation.
The analysis of financial, economic and political indicators has allowed us to summarize the events as follows. The maintenance of large current account deficits via capital account surpluses (as well as domestic inflation) became problematic as investors became more risk averse to emerging market exposure as a consequence of the Asian financial crisis in 1997 and the Russian bond default in August 1998. After crafting a fiscal adjustment program and pledging progress on structural reform, Brazil received a $41.5 billion IMF-led international support program in November 1998.
In January 1999, the Brazilian Central Bank announced that the real would no longer be pegged to the US dollar. This devaluation helped moderate the downturn in economic growth in 1999 that investors had expressed concerns about over the summer of 1998, and the country posted moderate GDP growth.
The Brazilian real’s fall in January 1999 was the result of an ill-conceived currency policy. Essentially, the problem can be traced to two factors. The first is that due to the overvaluation of the real, imports increased which lowered GDP and foreign direct investment. The second factor was the decline in private savings. A higher interest rate was needed to maintain capital inflows to support the exchange rate. Thus GDP decreased, as did savings.
Economic growth slowed considerably in 2001 - to less than 2% - because of a slowdown in major markets and the hiking of interest rates by the Central Bank to combat inflationary pressures. Investor confidence was strong at yearend 2001, in part because of the strong recovery in the trade balance.
The analysis of this situation showed that there were lessons to be learned which could help other countries in the future.
This paper will deal with the 1999 Brazilian currency crisis. It will discuss Brazilian economy before during and after the crisis, as well as the role of the government. It will also analyze the events and financial and economic factors that caused the crisis and examine the lessons learned.
Many countries have at one time or another dealt with a currency crisis. A crisis only seems to occur for fixed rate or pegged currencies, since floating currencies are able to adjust on a relatively gradual, daily, basis to forces affecting them. A currency crisis is identified as an official devaluation or revaluation, or instances in which the currency is floated. It is also sometimes known as a balance of payments crisis.
Brazil, located in eastern South America, achieved independence from Portugal in 1822. Brazil enjoys over 7,000 km of Atlantic coastline and yet borders on every other South American country with the exception of Chile and Ecuador. It is considered to be a large country both in size (8,511,965 sq km) and population (176,029,560). The climate is mainly tropical and it is highly regarded for its natural wonders such as the Amazon River and Amazon rain forest (CIA World Factbook).
The Brazilian Economy
The Brazilian economy is the largest in Latin America and one of the 10 largest in the world. Brazil is part of the MERCOSUR trade agreement along with Argentina, Paraguay, and Uruguay. The Brazilian currency is the real. From October 1994 through January 14, 1999, the official rate was determined by a managed float. Since January 15, 1999, the official rate floats independently with respect to the US dollar. According to U.S. Customs statistics, the U.S. trade surplus with Brazil was $1.9 billion in 1999, down over 70 percent from 1998. In 2000, U.S. exports to Brazil increased 10 percent to $12.9 billion and imports from Brazil rose 23 percent to $13.2 billion.
Recent statistics (2001) show Brazil’s current situation:
GDP: purchasing power parity = $1.34 trillion
GDP per capita: purchasing power parity = $7,400
GDP real growth rate = 1.9%
Population below poverty line = 22%
Inflation = 7.7%
Unemployment = 6.4%
Brazil’s largest trading partners (for both imports and exports) include the US, Argentina, Germany, Japan and Italy (CIA World Factbook).
How did the crisis begin?
Most of the economic and financial analysts globally never argued in the late 1990s whether the Brazilian real would be devalued, only on the timing and by how much (Eiteman, Stonehill, Moffett). At the time of the introduction of the real in July of 1994, its value had been artificially maintained by the Brazilian government in order to try stabilize expectations for economic and financial growth. The devaluation of the Brazilian real eventually became a reality from the government’s inability to resolve continuing current account deficits and domestic inflationary forces.
Rising instability in Russia created difficulties for Brazil’s economy and negative perceptions of the credibility of the emerging economies. With this in mind, investors around the world changed the composition of their portfolios toward high quality, lower risk assets and thus, greatly curtailed the access of developing countries to foreign savings. These negative expectations of the Brazilian economy led the government to adopt severe fiscal measures with a conservative approach to monetary policy. At the same time, toward the end of 1998, the government started to progressively rebuild the country’s reserve position and preserving exchange policy with the help of the International Monetary fund.
The restrictive economic policy produced a decrease in the level of activity and investment indicators mainly in the second half of the year. In the first six months, interest rates gradually subsided and foreign capital flows remained steady as accumulated product increased by 1.32 percent (1998 Annual Report). In the second half of the year, however, the impact of the Russian crisis on capital flows forced the authorities to reverse monetary policy, while adopting emergency structural measures of a fiscal nature. Restrictions on foreign credits and an increase in internal interest rates put a damper on internal economic activity.
Inflation continued to decline in 1998 as a result of such factors as lesser internal demand, an adequate supply of farm products, lower fuel prices and the enhanced foreign competition created by the process of economic liberalization that has marked recent years.
The balance of payments closed in 1998 with a deficit of US$36.1 billion. Major players in this deficit was the net capital outflow of US$16.5 billion from the credibility crisis and the current account deficit of US$33.6 billion, equivalent to 4 percent of GDP.
Listed below are some measures of Brazilian Economic Performance Indicators for 1998:
Change in real gross domestic product for 1998 is -0.5 %
The inflation rate (CPI) decreased from 4.8% in 1997 to -1.0 % in 1998
The real interest rate increased from 19.0 % in 1997 to 30.5% in 1998
The trade deficit as % of GDP increased from 6.1% in 1997 to 8.2 % in 1998
International reserves (billion US$) decreased from 52.2 in 1997 to 40.0 in 1998
The exchange rate R$/$ (end of period) depreciated from 1.117 in 1997 to 1.207 in 1998
The Currency Crisis – 1999
How did the crisis go?
In January of 1999, Brazil redefined its exchange system and adopted a free floating rate as a means of coping with the scenario of instability provoked by a succession of external jolts. The events of the crisis that led to changing its exchange system occurred during the week of January 11, 1999, the week of the real crisis. Primarily what occurred during this week was that the real was hovering around the bottom of its allowed trading band, billions of dollars in capital flowed out of the country, and the Brazilian equities fell in value. However, on Friday, January 15, the real was temporarily floated, allowing the real to decrease even further. As a result, the equity markets rebounded on the news of floatation, and rose by 28 percent (Eiteman, Stonehill, Moffett).
During the following week of the crisis, the temporary float was made permanent and the real continued to fall in value. In addition to this change, the Central Bank announced that it would increase the prime lending rate from 36 percent to 41 percent in order to limit the inflationary pressures from the devaluation of the real.
In the context of the new exchange system, several measures were adopted in the first quarter of 1999 to preserve the stabilization process, including the increase in interest rates as just mentioned, compulsory reserves on time deposits, offers of securities tied to the exchange rate, and exchange market deregulation. By the end of March 1999, it became evident that these policies started to dampen the inflation trend, recover foreign revenue inflows, and lessen the volatility of the exchange rates. All in all, these events helped to put to rest the negative expectations that had existed in relation to the macroeconomic performance of the Brazilian economy.
The government continued to adjust public sector accounts not only helped to rebuild expectations, but also is normalizing capital flows, as seen by the strong primary surpluses registered during the year. For example, the public sector borrowing requirements in the primary concept registered a surplus of R$31.1 billion, equivalent to 3.1 percent of GDP, a mark quite higher than the 1998 result of 0.01 percent of GDP (Annual Report 1999).
The 1999 balance of payments had a differentiated pattern of transactions with the rest of the world, when compared to previous years. When the exchange system was based on bands, the balance of payments had large surpluses and deficits, with strong upward and downward movements in Brazil’s international reserve position. Once the floating rate system had been adopted, Banco Central almost ceased intervening if the foreign currency market and fluctuations in reserve levels became much less tense. In other words, the balance of payments has tended to adjust itself through rates of exchange, with little need for using reserves as a financing instrument.
The change in interest levels altered the composition of Brazilian foreign accounts, principally in terms in goods and services not related to income. The current account deficit declined from US$33.6 billion in 1998 to US$24.4 billion in 1999.
Evolution of the balance of payments has also contributed to improving international investors’ perception of Brazil’s country risk. Brazil’s current account deficit declined by 27 percent in 1999 in comparison to the previous year. It closed at a level of US$24.4 billion. One should also take note of the reductions of US$3.5 billion in the service account deficit and US$5.4 billion in the trade result, despite the decline in the prices of Brazil’s major export products.
What actions were taken by the government?
In order to restore confidence in the currency after the initial devaluation, the government tightened monetary policy. The central bank raised nominal interest rates to 45%. This was possible without subjecting the economy to a banking crisis due to the relatively low capitalization ratios of the Brazilian commercial banks. The ratio of loans to capital in Brazilian commercial banks was only 2.5:1 in 1998 (Gruben and Welch p.87). This meant the banks were able to withstand the increases in nonperforming loans which were inevitable with such a high interest rate. This tight monetary policy was a good way to stop investor panics.
Listed below are some measures of Brazilian Economic Performance Indicators for 1999:
(Bozano Simonsen, Brazil Research, 1999)
Change in real gross domestic product for 1999 is -2.5 %
The inflation rate (CPI) increased from –1.0% in 1998 to 10.5% in 1999
The real interest rate decreased from 30.5% in 1998 to 21.6% in 1999
The trade deficit as % of GDP decreased from 8.2% in 1998 to 7.0% in 1999
International reserves (billion US$) decreased from 40.0 in 1998 to 36.0 in 1999
The exchange rate R$/$ (end of period) depreciated from 1.207 in 1998 to 1.700 in 1999
The currency crisis that Brazil experienced in 1999 was relatively mild and short-lived compared to other such crises experienced around the world at that time. The Brazilian crisis only had a very limited impact on an already troubled region of the world. The current account deficits and poor fiscal policies of countries in Latin America were the causes of current recessions and depressions in the area rather than simply the Brazilian crisis.
However, it is arguable that Brazil’s currency crisis spread to Argentina and was a major cause of the current Argentinean crisis and has impacted Paraguay and Uruguay in an adverse way. Brazil, Argentina, Paraguay, and Uruguay are all partners in the MERCOSUR trade agreement, so the devaluation of the real has made Brazilian products more competitive among these countries, especially in Argentina where prior to the crisis, 30 percent of its exports went to Brazil. With the drop in the value of the real, Argentinean exports became more expensive and were demanded less by Brazilians, and at the same time, more Argentineans began importing the now cheaper Brazilian goods. According to the IMF’s May 1999 World Economic Outlook, “Argentina has the closest trade links with Brazil among the major Latin American economies, and Brazil’s currency depreciation and recession have further worsened Argentina’s external economic environment. This follows a decline in economic activity in the latter part of 1998 as a result of the reduced supply of external financing, after three years of vigorous economic recovery from the Mexican crisis” (p.11). Only two years after the Brazilian crisis, Argentina ran into a crisis of its own.
As for some of the other major economies in the region, Mexico and Venezuela all suffered the least from the Brazilian crisis. In Mexico’s case, it was able to avoid any major repercussions due to its strong trade ties with the United States. Venezuela’s main export is oil, and until recently, exporting this commodity has kept it relatively insulated from any economic shocks coming from Brazil. Chile, another Latin American economy, has relatively low public debt, thus it is able to borrow money should it need to spend its way out of trouble and therefore has avoided any attacks on its currency by speculators. It should be noted however, that the emerging market crisis has led to general declines in commodity prices around the world and Chile has had to suffer the effects of a drop in copper prices which make up “40 percent of exports and 9 percent of GDP,” (IMF, Oct. 1999, p.45) of the Chilean economy.
The other negative effect that the Brazilian crisis has had would be on the flows of foreign investment money flowing into emerging markets. After the Asian crisis which led to a Russian crisis and the general collapse of emerging stock markets, the Latin American markets which had been avoiding current account deficits thanks to large amounts of foreign investments, suddenly began experiencing large capital outflows. Suddenly, the global appetite for risk seems to have vanished.
So, in conclusion, the current weakness in Latin America was not just caused by the Brazilian crisis, but on the general global economic slowdown since the exports and foreign investment these emerging markets depend on have been reduced by the slowdown.
Causes of the crisis
There were a number of key causes that led to the Brazilian currency crisis. Although there were many small factors that contributed to the problem, the main causes were inflation, poor fiscal policy, and poor currency exchange policies. All of these factors were the major contributors that led to the 1999 currency crisis in Brazil. Although the Brazilian government tried to fight all of these problems at different times before the 1999 currency crisis, they all contributed to the problem.
From the beginning of the 1980’s to the early 1990’s Brazilian monetary policy officials did not fully understand the relationships between a poor tax system, continuous fiscal deficits, printing money to cover the costs the tax system could not and inflation (Gruben & Weltch, p. 12). The most notorious predisposition of Brazil’s economic history was their thoughts on inflation. (Gruben & Weltch p. 76). In 1972, Brazil experienced inflation levels of just under 20 percent, but by 1994, inflation reached an astounding 3000 percent (Saad Filho & Mollo, p. 109). Brazil has the highest inflation rates in Latin America. From 1986 through 1994, inflation rates in Brazil ranged any where from 100 percent to 2700 percent per annum. (Gruben & Weltch pg 76 - see Appendix 1).
During the period between 1986 and 1994, Brazil developed many different plans to help control its inflation problem. Brazil used five different inflation control programs before it introduced the Real Plan. The predecessors of the Real plan include the Curzado in 1986, the Bresser in 1987, the Verao in 1988, the Collor in 1990, and the Collar II in 1991 to 1993. All of these plans showed an abrupt reduction of inflation in the first quarter after implementation but failed to produce solid results after that period (Institudo de Pesquisa Econominca Aplicada). http://www.ipea.gov.br/pub/td/td_2000/td0753.pdf The Cruzado was the first plan and it was the most successful of the five. However, the success of the Cruzado plan was minimal at most. The Cruzado saw inflation exceeding 10 percent per month before the plan was even a year old (Gruben and Welch p. 77).
The most successful plan to control inflation in Brazil was the Real Plan. The Real Plan was introduced in July 1994. The main elements of the Real Plan included the introduction of a new currency (the real); the de-indexation of the economy; an initial freeze of public sector prices; the tightening of monetary policy; and the floating of the currency, with a floor specified for its value vis-à-vis the dollar. These policies have enabled Brazil to get monthly inflation rates down from 45 percent during the second quarter of 1994 to an average of less than 1 percent in 1996 (The world Bank). http://www.worldbank.org/fandd/english/0997/articles/0180997.htm
Other problems in Brazil that were addressed by the Real Plan included the enhancement of competition in the business sector. Brazil moved from government owned business to private business. This movement opened the doors to allow more foreign investment which drastically helped attract large capital inflow from foreigners (Guedes da Costa). Brazil also opened up trade and lowered its tariffs from an astonishing 51 percent in 1988 to an average of 14 percent by the end of 1994 (Gruben and Welch). The reduction of tariffs helped to increase Brazil’s trade activity in the world marketplace.
With the introduction of the Real Plan, Brazil looked to reduce its large deficit. The large deficit was mainly due to poor fiscal policy. When the Real Plan was initiated, it aimed to reduce fiscal spending enormously (Guedes da Costa). The Brazilian Congress approved a reduction in the funds transferred by the federal government to the states and municipalities. The federal government also increased income taxes (Richards 1999).
Although the Real Plan initially aimed to reduce debts, debt continued to grow in Brazil. Analysts continue to cite Brazil’s fiscal problems as having been the chief cause of Brazil’s exchange rate crisis. Brazil’s operating debt was not growing significantly but their interest payments on their previous debts continued to compound until they reached record high levels in 1998. In 1998, the Brazilian debt was about 8 percent of GDP (Appendix 2). A high debt raised speculation amongst investors which was expressed in high interest rates. Brazil’s high debts were making it difficult to maintain the low inflation rates created by the Real Plan.
Although the real plan had good intentions towards fiscal policy, the goal of reducing fiscal spending was not enough. The Brazilian deficit was already too large before the Real Plan was introduced and the Real Plan did not focus enough on reducing the existing deficit. The government reduced spending but not the deficit. Interest on the deficit grew far too quickly.
Finally the last part of the Real Plan that led to the cause of the Brazilian currency crisis was the exchange rate policies in the country. The Real plan worked by pegging the Real to the American dollar. Pegging the Real to the U.S. dollar proved to be successful to lower inflation but it eventually led to be a huge cause of the currency crisis in Brazil. The world has proved that pegs do not work. Foreign reserves ca not last forever. The world-renowned “Bretton Woods System” initiated by the United Kingdom and the United States in 1944 could not even withstand foreign reserve requirements. Although the Bretton Woods System was not successful to help control monetary policy among nations and failed in 1971, it was responsible for the creation of the International Monetary Fund, which later would play a big role in assisting Brazil with their currency crisis, and the General Agreement on Tariffs and Trade, now known as the World Trade Organization (Hughes and MacDonald p. 22).
Exchange rates in Brazil under the Real Plan were controlled under an upper and lower band. Brazil operated with a crawling exchange rate which was allowed to fluctuate within the established bands which were periodically adjusted (Appendix 3). A small controlled devaluation had been built into the system so as to permit deviations from the U.S. inflation rate and more generally some alleviation of on going pressures against the currency. By the end of 1998, the controlled devaluation that was built into Brazil’s crawling peg had not been enough to offset the cumulative differences between U.S. and Brazilian inflation rates (Gruben & Welch).
At the beginning of 1999, Brazil had more than $70 Billion in foreign reserves. With all the turmoil between the inflation rates of the U.S. and Brazil and the growing fiscal deficit, foreign reserves were depleting fast as Brazil tried to maintain the value of its currency. Outflows of $350 to $400 million of foreign reserves were being used up on a daily basis.(Gruben and Welch)
Realizing the growing problem in Brazil, in November 1998, the International Monetary Fund stepped in with a pre-emptive program to assure foreign currency speculators that attacks of the Brazilian currency would not be worth the expense. The IMF contributed $41.5 Billion to assist the Brazilian currency.
Even the assistance of the IMF was noy enough. There was a strong belief that the Brazilian currency was overvalued. People believed the Brazilian currency was overvalued anywhere from 15 to30 percent.
Finally, if one specific event could be pegged to the cause of the collapse of the Brazilian currency, it would be the announcement by Minas Gerais, the governor of Itamar Franco, that he would suspend his state’s payment of debts to Brazil’s national government for three months. Soon after Gerais made his announcement, six other governors followed suit and defaulted on their debt payments. After all these announcements, capital started to flow out of Brazil like never before (Gruben and Welch).
One week after Gerais made his announcement, Gustavo Franco, the Governor of Brazil’s central Bank resigned. The central Bank allowed for a 9 percent devaluation and capital outflows reached over $1 Billion a day. Many rumors said the currency would be removed from the U.S. peg but these rumors were denied by the central bank. Two days after they were denied, Brazil announced its exchange rate regime would follow a floating approach.
By 1999, corruption in Brazil had been much improved to a large degree. Brazil had gained a reputation of corruption in the early 1990s when Fernando Collor was president. Collar was ousted from power in a corruption scandal in 1992 as inflation ballooned to 1000 percent per year. In general, South American countries seem to have a stigma of being corrupt, as most emerging economies often do. However, the role of corruption in the 1999 currency crisis was very minimal.
Post-Crisis Economy – 2000 and beyond
The impact and aftermath of the crisis
The events surrounding a currency crisis such as this one tend to have a major impact on investors. Investors are by nature both wealth maximizers and risk minimizers. Wildly fluctuating currencies and hyperinflation make the investing environment highly risky and uncertain. Those doing business with Brazil had a difficult time with cost certainty. Risks such as these will also make it more costly for those who attempt to hedge to achieve cost certainty. A scenario such as this will tend to make investors to lose confidence in the country and seek alternatives elsewhere. Other countries may provide similar opportunities but without the excessive risks. As a result, investment levels drop in conjunction with dropping confidence. Confidence takes time to restore, and it will be restored gradually.
Over the course of the year, the increased pace of economic activity was generated to a great extent by growth in credit to the private sector, mainly in operations with individual consumers and the sectors of commerce and other services. This route reflected steady decrease in the basic interest rate of the economy, cutbacks in the rates of compulsory reserves on demand resources and adoption of a series of key measures aimed at improving banking activities. These measures also resulted in decreasing interest rate charged on lending operations. As a whole, these circumstances encouraged financial institutions to return to their regular role as suppliers of credit, breathing into this channel of monetary policy transmission (Annual Report 2000).
The ratio of gross fixed capital formation to GDP remained stable in 2000 when compared to 1999. This result came from only moderate expansion in the construction industry, when contrasted with the sharp increase of 13 percent in the output of capital goods. At the same time, import of capital goods, which had slipped somewhat in the last two years, registered real growth in 2000.
The consistency of the Brazilian economic policy has reinforced confidence in the fundamentals of the Brazilian economy among both internal market agents and external investors. In this context, the strictness of its fiscal policy has created consistently significant primary surpluses and ratified the nation’s capacity to create public sector savings, which is important in stabilizing the debt/GDP ratio.
The steady decline in the public sector borrowing requirements reflects the downward trend in interest rates and has contributed significantly to improved perception regarding the long-term sustainability of public sector liabilities.
In 2000, the nation was able to finance its foreign accounts with ease as a result of the reduction in the risk level perceived by foreign investors and the steady improvements registered under the foundations of the Brazilian economy. For example, financing of the current account deficit was fully covered by the strong inflow of foreign direct investments, which came to a net total of US$30.6 billion. Also, the nation was able to lengthen the terms of its sovereign bond issues.
In 2000, the balance of payments turned in a lesser level of foreign resources utilization. The current account deficit remained stable, while external debt service payments declined. With this, the net flow of medium and long-term foreign capital reversed course from net amortizations of US$4.9 billion in 1999 to a net inflow of US$7.8 billion in 2000, at the same time in which net short-term capital outflows registered a reduction of US$2.1 billion. Net foreign investments came to US$30.6 billion, closing at the highest value in history. This result made it possible to improve the position of external financing requirements to 1.01 percent of GDP (Annual Report 2000).
Were the government’s actions successful?
The government’s actions appear to have been extremely successful in rescuing the Brazilian currency. As mentioned previously, immediately after the devaluation, the government tightened its monetary policy. This action was quite successful as the immediate effect was a surge in inflation but which quickly stabilized. At the same time, the currency was able to again become relatively stable within a period of less than six months. Brazilian GDP for 2000 surged to 4.5%. All these measures point to a successful reaction to the crisis on the part of the Brazilian government.
Can a similar crisis be avoided in the future and what actions can prevent or mitigate such a crisis?
This type of classic currency crisis can easily be avoided, and in fact almost was by Brazil. “Banking system strength (including a high ratio of bank capitalization to loans—that is, low leverage—and a strong loan portfolio) can allow the government to choose policy options to stabilize an exchange rate before a devaluation occurs” (Gruben and Welch p.70). At the same time, following a prudent government spending strategy with a relatively balanced or surplus in the current account is another means of insuring this type of currency crisis is avoided.
What lessons from this crisis can others learn so the same problem does not occur?
Overvaluation of the nation’s exchange rate is detrimental to the country. When overvaluation occurs, two problems arise in the economy. First, an overvalued exchange rate is often associated with a boom in consumption involving a large increase in imports (1999, Cardoso and Helwege). An overvalued exchange rate encourages imports to be brought forward because people fear that they may become more expensive later. When this take place at the same time as trade liberalization, its effects are increased, leading to a significant jump in imports as controls are dismantled. If reforms come across credibility problems, firms and households doubt that trade liberalization will be maintained and begin to import excessively as a precautionary measure. For these reasons, a boom in imports is often characteristic of periods of economic reform. Even when exports grow fast, fixed exchange rates foster trade deficits. Second, overvaluation of the exchange rate encourages a decline in private savings as residents substitute present for future consumption (1999, Cardoso and Helwege). By undermining savings, overvaluation hinders economic activity because high interest rates are needed to maintain the capital inflows to support the exchange rate. As growth decreases, savings decline further, leading to a vicious circle of low savings and low growth. Both of these problems were observed in the Brazilian currency crisis.
Appendix 1: Inflation In Brazil
Brazil Annunal Inflation (%)
source: Latin Business Chronicle
Appendix 2: Brazil’s Fiscal Deficit
Appendix 3: Brazil’s Exchange Rate Band
Cardoso, E., Helwege, A. (1999). Currency Crises In the 1990s: The Case of Brazil. www.stern.nyu.edu/globalmacro/countries/brazil.html CIA World Factbook. (2002). Brazil. http://www.cia.gov/cia/publications/factbook/geos/br.html
Eiteman, D.K., Arthur, I., Moffett, M.H. (2001). Multinational Business Finance. Boston: Addison Wesley.
Gruben, W.C., & Welch, J.H. (2001). Banking and Currency Crisis Recovery: Brazil Turn Around of 1999. Economic and Finacial Review, forth quarter.
Gruben, W.C., & Welch, J.H. (1999). Bending The Paradigm: How Brazil got Itself into a Currency Crisis and out. Bank Problems: A Global Perspective,39(11)
Guedes da Costa, T. (2000) Brazil in the New Decade Searching for a Future. The CSIS Press.
Hughs, J.E., Macdonald, S.B. (2002). International Banking. Boston: Pearson Education.
Institudo de Pesquisa Economica Aplicada.(2000). The Nairu, Unemployment and the Rate of Inflation in Brazil. Rio De Janeiro: Fundacao Publica http://www.ipea.gov.br/pub/td/td_2000/td0753.pdf International Monetary Fund, World Economic Outlook: September 2002; chapter 1. 17
Richards, D.G.(1999). The Poverty of Decocracy in Latin America. Review of Radical Political Economics,33(3)
Saad-Filho, A., & Mollo, M.R. (1999). Inflation and Stabilization in Brazil: A Political Economy Analysis. Review of Radical Political Economics, 34(2)
The World Bank.(2000). The Real Plan, Poverty, and Income Distribution in Brazil.