SARNEY TEMPORARILY LEGALISES DLR PARALLEL MARKET

  Brazilian President Jose Sarney
  announced a move which temporarily legalises the purchase of
  U.S. Dollar currency in the parallel market, aimed at promoting
  imports of foreign goods.
      In a speech, Sarney justified his measure as a need to face
  "current well known difficulties to obtain foreign loans for the
  purchase of goods."
      The parallel market, although tolerated, is technically
  illegal. For the past year, the dollar in the parallel market
  is being sold at 25 to 100 pct above the official rate.
      Sarney's decision means that Brazilian importers of
  machinery and industrial equipment can buy dollar currency in
  the parallel market without having to wait for the issuing of
  an official order from the Banco do Brasil's Foreign Trade
  Department (Cacex).
      Sarney also announced measures to boost exports in an
  effort to strengthen the country's trade balance and alleviate
  the risk of a reduction of foreign loans for this sector of the
  economy.
      The president authorised the National Foreign Trade Council
  (CONEX) to resume operating as the ruling body of Brazil's
  trade policy, with participation of the private sector.
      The Council had been closed three years ago by the military
  government of former President Joao Figueiredo.
      Tomorrow, Brazil was due to fulfill payment of 15 billion
  dollars in short range credit lines, but its economic officials
  have suggested a 60-day extension in the deadline in order to
  seek a renegotiation with its creditors.
      Sarney told members of the Council that for Brazil it is a
  must to recover its annual trade balance surplus to the 12
  billion dollars average recorded in 1984 and 1985, and which
  dropped sharply last year to 8 billion dollars.
      He attributed the poor performance of Brazil's trade
  balance in 1986 to protectionist moves by industrialised
  countries, the fall in the prices of basic goods and the crisis
  faced by several of Brazil's Third World trade partners.
  

