EXCHANGE PROBLEM

Evening Post, Volume CXIX, Issue 24, 29 January 1935, Page 12

EXCHANGE PROBLEM

BRAZIL AND ITS COFFEE Many are the devices for allocating the foreign exchange which a debtor country in difficulties acquires as the proceeds, of what she 6ells abroad. Brazil is distributing her favours .for .imports among countries according as they take her exports. The Bank of Brazil has decided to allocate the quota of foreign currency obtainable over its countries at the official rate among foreign countries, according to the quantity of coffee they buy. By this arrangement the United States will have a right to 46 poi- cent, of the total foreign currency obtainable. France to 13 per cent., Holland to 5 per cent., Italy to 4 per cent., Switzerland and Belgium to 3 per cent, each, the Argentine to 2 per cent., Denmark and, Finland, to 1% per cent, each, and Portugal to 1 per cent. The remaining 20 per cent, will be divided among the countries not mentioned on this list, including Great Britain. In justification of Hhose new measures, the Bank of Brazil states that its reserve of foreign currency depends entirely on the payments for the exports of coffee. The Brazilian Government has' on several occasion* during recent months attributed its inability fully to meet the coffee loan coupons to the "impossibility of acquiring foreign exchange." On October 1 it was announced that there were sufficient funds in hand to enable a first payment of 50 per cent, of sterling value on account of coupon 14 (due July 1, 1933), of San-Paulo Vh per cent. (Coffee Institute) Loan,l92C.