Inflation Anxiety Scuttles Brazilian Bond Sale: For...

Inflation Anxiety Scuttles Brazilian Bond Sale: For the third straight week, Brazil’s central bank canceled its auction of benchmark bonds, or BBCs, because inflation-wary investors demanded higher interest than the bank was willing to pay. The bank is trying to reduce inflation anxiety by not accepting low bids on the bonds, analysts said. Brazil’s inflation rate, as measured monthly by Fundacao Getulio Vargas, an academic research institute, was 38.26% in December. The rate for all of 1993 was 2,567%, the highest ever. Instead of selling the bonds, which pay predetermined returns for a fixed maturity, the government has borrowed one day at a time and issued dollar-linked treasury notes, securities with returns tied to the rate of inflation or value of the dollar.