The Chargé in Brazil (Scotten) to the Secretary of State
[Received 6:04 p.m.]
119. Embassy’s 103, April 5, 2 p.m.58 The Bank of Brazil closed exchange today for maturities and daily quotas for February 16.
A circular issued today by the Bank of Brazil authorized an increase in the commercial banks “bought” position in free exchange from $5000 to $10,000 daily. Authorization is now given for the closing of future exchange for (a) merchandise already imported (stocks), within the limits for daily quotas now established, and, (b) a maximum of 2,000 pounds (also daily) for remittances without drafts (open accounts).
Commercial banks are purchasing 70% of export drafts at 18.350 milreis to 18.420 milreis and selling free exchange for payment of [Page 390] import drafts as 18.500 milreis to 18.550 milreis. The Bank of Brazil has increased the selling rate for compensation marks from 6 milreis to 6.100 milreis and the buying rate from 5.500 milreis to 5.700 milreis. In this connection the Director of Exchange informs me in confidence that the Bank of Brazil has effected a substantial reduction in its “bought” position so that today it amounts to only 3,723,226 compensation marks.
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