Brazil may lend up to $10 billion to IMF

Brazil may lend up to $10 billion to the International Monetary Fund (IMF) through a bilateral agreement signed last week by Central Bank's President Ilan Goldfajn, at the IMF meeting in Washington.

The agreement is part of the new round of bilateral agreements, worth $360 billion, negotiated by 26 countries, with a deadline set for December 2019 that may be extended until 2020, if the countries agree.

The Central Bank explained that if the IMF needs the funds provided for in the agreement, the money will not come from international reserves. "Operations with the IMF simply represent a change in the composition of our reserves, since the country adheres to the bilateral agreement with the IMF by purchasing reserve assets of the international body, paid in SDR as the unit of account (the currency value is determined by summing the values of five currencies: US, Japan, UK, Euro Zone and now China). In other words, even if the bilateral agreements are eventually used by the IMF, the international reserves will not be reduced," reported the central bank.

Translated by Amarílis Anchieta