20000115

Brazil's real ends firmer amid bright economy view

SAO PAULO: Brazil's real currency finished a firm 0.9 percent stronger Thursday as some banks started selling dollars in the market, betting on an improving economy this year, traders said.

One year ago today, the real started its steep depreciation against the dollar, which reached 45 percent, after the Central Bank abandoned its rigid currency policy that kept Latin America's biggest economy steady for 4 1/2 years.

At Thursday's close of 1.813 per dollar, the real was 33 percent weaker compared with its pre-devaluation level.

"Today's move to sell dollars was linked to the better economic setting," said one local trader. Banks had stocked up on dollars in recent sessions concerned about higher interest rates in the United States and the impact that could have on emerging markets.

While those rate concerns lingered, banks also started focusing on the outlook on the domestic economy, traders said.

Finance Minister Pedro Malan painted a somewhat improved picture of the country's economy for 2000 in an interview with local television Globo.

"Inflation should decelerate compared to 1999 and the economy should see growth again, while there should be no external pressure from a crisis abroad," Malan said. "Unemployment should also decline during the course of the year," he added.-Reuters