Thursday, December 3, 1998 Published at 11:09 GMT
IMF approves Brazil bailout
Traders in Brazil have been having a rough ride
The International Monetary Fund has approved an immediate $5.3bn emergency payment for Brazil to rescue its economy.
The money is the first instalment in a package worth more than $41bn worked out between Brazil, the IMF and leading industrial nations.
Brazil has been relatively calm after the disastrous events of August and September, when about $30bn of funds fled the country amid a dramatic loss in confidence, prompting fears of a financial collapse for the world's eighth largest economy.
But the IMF's board of directors in Washington gave a relatively upbeat assessment of Brazil's prospects, predicting growth should resume in 2000 after a recession next year. The board also predicted Brazilian unemployment would rise.
BBC Sao Paulo Correspondent Stephen Cviic says there is considerable international interest in helping Brazil out of its financial difficulties since it is seen as a way of containing the wider global crisis.
The Brazilian government has pledged to tackle its huge budget deficit with a tough austerity programme.
On Wednesday the lower house of Brazil's Congress rejected plans to raise civil servants' pension contributions.
President Fernando Cardoso said he was deeply disappointed by the rejection, which he described as incomprehensible.
He warned that further spending cuts would now have to be made in the government's already greatly reduced budget.
A further $4.5bn is due to be released by the IMF in January.
The Brazilian package is one of the biggest ever arranged by the IMF, but still smaller than programmes for South Korea and Indonesia in the wake of the Asia's economic crisis.