The United States Federal Reserve(Fed) on Wednesday opened a credit line of 30 billion U.S. dollars for Brazil through a swaps operation of dollars for reais.
The Central Bank of Brazil said the deal did not indicate the economic condition of the country. Rather, it would increase the availability of dollars and improve liquidity conditions.
The biggest impact of the international financial crisis on the Brazilian economy has been the shortage of dollars for the export sector. The agreement with the Fed will ease the situation and reduce pressure on the price of the dollar.
The agreement will help combat the impact of the global credit crisis on the Brazilian economy and "shows the importance of the close cooperation" between the monetary authorities in the current world situation.
The bank said it will take operational measures to implement the initiative, under the limits and conditions set by the National Monetary Council.
The dollar reserve, available for Brazil till April 30, 2009, will be used when the government considers it necessary.
The Fed has also opened similar swap credit lines for Mexico, South Korea and Singapore, with the same amount and terms.
Source: Xinhua
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