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IMF pledges rescue deal for Brazil

THE INTERNATIONAL Monetary Fund issued a strong statement of support for Brazil yesterday, raising hopes that a new package of financial aid can soon be finalised.

Michel Camdessus, the IMF managing director, said Brazil's President, Fernando Cardoso, had outlined economic programmes in meetings with the fund . "The IMF management fully supports these policies," Mr Camdessus said.

He spoke in Washington as the IMF and World Bank ended its annual meetings, which have been characterised by growing fears that financial collapse will spread from Asia and Russia to Latin America and the developed world.

Brazil has promised "to put rapidly in place a strong, front-loaded and sustained fiscal adjustment programme, designed to stabilise the ratio of public debt to GDP by the year 2000," the IMF said in a joint statement with Brazilian authorities.

"The government is preparing the policy initiatives needed to ensure this outcome, and intends to announce them as soon as feasible during the month of October." Once a detailed programme is set out, there are hopes that it could be "supported financially by the IMF and other members of the international community".

The meetings closed on a self-congratulatory note, but World Bank chairman, James Wolfensohn, said there had been differences between his organisation and the IMF. "We are in full accord on the objectives, it's a question of degree." He felt not enough stress was placed on helping the poor. "I didn't think the balance was right."