MercoPress. South Atlantic News Agency

Brazilian admits currency crisis.

Brazilian Minister of Economy publicly acknowledged in New York and Rio do Janeiro that Brazil is partly to blame for the current volatile Argentine situation.

Pedro Malán admitted that the devaluation of the Brazilian currency in January '99 was among the factors leading to the problems that Argentina now faces, given the fact that Brazil has become Argentina's main trading partner. However Mr. Malán added that he trusted President De la Rúa administration since "they know how to revert turbulences and we believe the worst is over".

Mr. Malán remarks were made during an international banking and risk assessment agencies conference held last week in Rio do Janeiro, where the Brazilian, --and South American--, situation was considered.

Mr. Malán and Central Bank president Armiño Fraga told the audience that in spite of the fact that the Brazilian economy has shown strong and robust foundations, there seems to be a kind of "paranoia" among overseas investors and even a "whiff of emergency" factor.

Bankers, mainly the IMF representative, Mr. Lorenzo Pérez, replied that Brazil is "still" considered "vulnerable" because international events could have a direct impact. Mr. Pérez mentioned oil prices and the ongoing Middle East crisis; the evolution of the American economy, whether it's a soft landing or not; the very weak Euro currency, and the still low prices for Brazilian exports, which prevented the country from achieving a trade surplus, as had been expected.

As a result of oil prices and the Argentine situation the dollar in Brazil jumped approximately 10% during October, from 1,80 Reales to almost 2,00 Reales.