G7 puts pressure on Brazil, silent on aid
Sheel Kohli in London
BRAZIL yesterday faced strong pressure from the Group of Seven industrialised nations to continue reforming its battered economy but they avoided making fresh pledges of cash to the crisis-struck country.
Following the Brazilian Government's decision to float the real on Friday, relief swept through Brazilian financial markets as the key Bovespa Index soared 33.4 per cent. The real, which suffered a steep plunge in early trading, closed down 8 per cent to 1.43 to the US dollar.
As Finance Minister Pedro Malan and Central Bank president Francisco Lopes prepared to meet United States Treasury Department officials and International Monetary Fund managing director Michel Camdessus, US Treasury Secretary Robert Rubin appeared to rule out further aid packages for Brazil.
Some analysts yesterday said the decision to float the real would prove an effective tool in helping turn around the economy.