Originally created 01/26/99

Brazilian real slips on semi-holiday

RIO DE JANEIRO, Brazil -- Brazil's currency slipped further Monday as the country's biggest market was closed for a holiday.

The real ended the day 1.79 to the dollar, down from 1.71 on Friday. But there was little trading because of a local holiday in Sao Paulo, Brazil's biggest city and financial center.

The smaller Rio de Janeiro Stock Exchange ended the day down 0.7 percent.

Currency traders said an unidentified foreign bank bought dollars early Monday, pushing the real's value lower.

On Jan. 15, the Central Bank let the real float against the dollar after four years of spending its reserves to keep the currency strong and inflation down. Since the devaluations began, the real has lost 32 percent of its value.

The decision was prompted by the outflow of dollars, as investors lost confidence in Brazil's ability to fix its economy. More than $45 billion have left the country since August.

The government expected the dollar drain to stop after the devaluation, but it didn't. About $7.5 billion has left the country this month.

The losses have raised speculation that the government might restrict the remittances of dollars. But a top official on Monday said that wouldn't happen.

"There no chance the government will use currency controls," National Treasury chief Eduardo Guimaraes said in an interview with the Estado news agency.


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