Brazil's Creditors Postpone Repayment of $4 Billion
Brazil's government creditors-including the United States-have agreed to postpone repayment of about $3 billion of interest and principal that came due in 1985 and 1986, as well as about $1 billion in principal payments due during the first half of this year, the French Treasury announced yesterday.</br></br>The agreement with the so-called Paris Club is seen as a victory for Brazilian President Jose Sarney, because the 17 government creditors in the "club" did not demand that Brazil sign an economic agreement with the International Monetary Fund, which is politically unpopular in Latin American debtor nations.</br></br>The rescheduling of some of Brazil's official debts is seen as a prelude to the renegotiation of repayment terms on more than $50 billion of Brazil's outstanding commercial bank loans, as well as new loans that the country will need if it is to pay its debts on time and buy vital imports.</br></br>Brazil, the developing world's largest debtor, owes foreigners about $108 billion. Roughly $9 billion of that is owed other governments; the rest is owed to commercial banks, suppliers and multinational agencies, such as the World Bank and the IMF.</br></br>Sarney had vowed not to sign an economic performance agreement with the IMF, the multinational financial rescue agency, because he feared domestic repercussions. Many debtor nations, including Brazil, perceive the IMF as interfering in their domestic policies and requiring them to take measures that lead to recession.