IMF to Cancel Its $400-Million Loan to Brazil
The International Monetary Fund, deeply worried about Brazil’s failure to carry out economic reforms, has decided to cancel a $400-million loan to the country due next month, U.S. officials said today.
The move has also abruptly ended talks between Brazil and its foreign creditor banks on stretching out repayments of about $45 billion of the country’s $100-billion foreign debt.
The U.S. officials said these developments could lead to a deepening of the debt crisis despite recent predictions that the worst was over.
The officials, who asked not to be identified, said the entire $1.5 billion the IMF was to pay Brazil in installments this year--not just the $400 million due next month--may be at risk.
Two years ago the IMF led a financial rescue plan for Brazil with a three-year, $4.5-billion loan.
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