Financial Times: "Uruguay obtiene préstamos de U$S 1,5B de Estados Unidos para apoyar a la banca"

Uruguay wins $1.5bn US loan to support banks
Financial Times. Published: August 4 2002
By Thomas Catán in Buenos Aires, Raymond Colitt in São Paulo and Edward
Alden in Washington

Uruguay on Sunday received a short-term loan of up to $1.5bn from the US
and imposed limited restrictions on bank withdrawals in an effort to avert
a collapse of its once-vaunted financial system.

The US bridge loan, which is intended to guarantee dollar-denominated
short-term deposits in Uruguay against a run on the banks, came as the
International Monetary Fund announced it would accelerate and increase its
funding for Uruguay to help stabilise the country's financial system.
The IMF, the Inter-American Development Bank and the World Bank pledged to
advance $1.5bn to Uruguay immediately, and to add another $800m to bring
total commitments to $3.8bn.

The bridge loan, which coincided with the arrival of Paul O'Neill, US
Treasury secretary, in the crisis-hit region, marks a deepening of US
efforts to avert a further downturn in the region, and a shift away from
the administration's hands-off approach.

The US money will come from the Treasury's exchange stabilisation fund,
the same vehicle used in the controversial bailout of Mexico in 1995.
But Treasury officials emphasised that, unlike the Mexican bailout, the
loan is virtually risk-free and will be repaid when new international
funds become available next week.

Uruguay's banks, which were due to reopen on Monday for the first time in
six days, have lost more that 40 per cent of their deposits as the crisis
of confidence in Argentina spread.

Uruguay's Congress on Sunday approved an emergency bill that would
restrict withdrawals of dollar-denominated, fixed-term deposits at the two
publicly owned banks. In contrast to the curbs imposed in Argentina last
December - which set off riots that eventually toppled the government -
accounts at private banks will be largely unaffected.

Alejandro Atchugarry, Uruguay's economy minister, said he was asking for a
"sacrifice" from the public but insisted the plan was the "only solution"
to the country's deep problems.

The Brazilian government continued talks with the IMF at the weekend and
hopes to announce a deal by the end of this week to stabilise its
currency.

Mr O'Neill, whose visit takes in Uruguay, Brazil and Argentina, last week
reversed his earlier doubts about additional aid to Brazil and expressed
confidence in its "sound fiscal and monetary policies". Yet Brasília was
hoping to see a "confirmation of that position", said Pedro Parente,
secretary of the presidency.

Pedro Malan and Arminio Fraga, finance minister and central bank chief
respectively, on Sunday night were to make their case to Mr O'Neill that
Brazil's economic fundamentals were unlike those of Argentina. Their key
points were to be that Brazil has a floating exchange rate, rising
productivity, and a debt that is largely denominated in local currency.

In a statement on Sunday, Mr O'Neill said that Uruguay has implemented
sound policies by embracing free markets, open trade and low inflation.