Resolution CMN No. 2082 — Dispenses on the emission limits and the backing method of the new unit of the Brazilian Monetary System - Real

RESOLUTION NO. 2082

Dispenses on the emission limits and the backing method of the new unit of the Brazilian Monetary System - Real.

The CENTRAL BANK OF BRAZIL, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the President of the NATIONAL MONETARY COUNCIL, by act of June 30, 1994, based on Article 8, paragraph 1, of Provisional Measure No. 542, of June 30, 1994, "ad referendum" of that Council, having in view the provisions of Article 4, item II, of the aforementioned Law No. 4,595/64, and Articles 3 and 4 of the cited Provisional Measure No. 542,

RESOLVES:

Art. 1. The Central Bank of Brazil is authorized to issue, between July 1, 1994, and March 31, 1995, up to:

I - September 30, 1994, R$7.5 billion;

II - December 31, 1994, R$8.5 billion;

III - March 31, 1995, R$9.5 billion.

Paragraph 1. The National Monetary Council may authorize additional emissions of up to 20% (twenty percent) of the limits established in the main text of this article.

Paragraph 2. The Central Bank of Brazil, at the time of the first emission of the Real and, after that date, quarterly, will present to the National Monetary Council a monetary program estimating the evolution of the main monetary aggregates, in such a way that the emission of the Real, respecting the limits established in the main text of this article, considers the execution of the General Budget of the Union, the operations of the external sector, and the operations with the institutions comprising the national financial system, including open market operations.

Art. 2. The backing for the emission of the Real will be composed of a portion of the available international reserves in foreign currencies and in gold, expressed by their equivalents in United States dollars.

Paragraph 1. Respecting the provisions in the main text of this article, the Central Bank of Brazil may apply the value of international reserves linked for backing purposes, including arbitrating the assets that compose it, always preserving their immediate liquidity.

Art. 3. The linking of international reserves will imply an accounting entry in an account named "Monetary Backing," concomitantly with a record in the "Authorized Monetary Emission" account of the Central Bank of Brazil, observing that:

Paragraph 1. The linking of international reserves will be carried out in volume and dates corresponding to the beginning of the quarters specified in Article 1 of this Resolution.

Paragraph 2. The parity used in the linking of international reserves will be R$1.00 (one real) per US$1.00 (one United States dollar), for an indefinite period.

Paragraph 3. The earnings from the applications of the linked reserves will not be incorporated into these, but should be added to the unlinked reserves.

Art. 4. For the purposes of this Resolution, consider:

a) authorized emissions as the volumes of reais corresponding to the linked values of equivalent international reserves, obeying the provisions of Article 1 of this Resolution;

b) realized emissions as the volumes of reais placed in circulation through credit to the "Circulating Medium" account or to the "Bank Reserves" account, which are part of the liabilities of the Central Bank of Brazil, and debit of the "Authorized Monetary Emission" account.

Art. 5. For the purpose of complying with the authorized emission limits established in Article 1 of this Resolution and from the first emission of the Real, the volume of realized emissions will be calculated by the monthly average of the daily balances of the Monetary Base on business days of the month.

Paragraph 1. Monetary Base is defined as the result of the addition of currency in circulation (paper money plus metal money) with the bank reserves maintained at the Central Bank of Brazil.

Paragraph 2. Currency in circulation is evidenced by the balance of the "Circulating Medium" account, which is part of the liabilities of the Central Bank of Brazil.

Paragraph 3. Bank reserves are those that commercial banks, savings banks, and financial institutions holding a commercial portfolio maintain in the "Bank Reserves" account, which is part of the liabilities of the Central Bank of Brazil.

Art. 6. The Central Bank of Brazil will maintain statements of the authorized and realized emissions of the Real, calculated from specific accounting records for this purpose.

Paragraph 1. The emission statements of the Real will be published monthly, specifying:

a) the volume of authorized and realized emissions, the linked reserves, and the observed parity;

b) the uses of the realized emissions, explaining their determining factors.

Paragraph 2. The President of the Central Bank of Brazil will forward, through the Minister of State for Finance, to the President of the Republic, to the Presidents of the Federal Senate and the Chamber of Deputies, a monthly statement of the emissions of the Real and its determining reasons, as well as of the international reserves linked for such purpose.

Art. 7. The Central Bank of Brazil is authorized to make the adjustments it deems necessary in the current regulations in light of the provisions of this Resolution.

Art. 8. This Resolution enters into force on the date of its publication.

Brasília, June 30, 1994

Pedro Sampaio Malan
President

NOTE: REPUBLISHED DUE TO ERRORS FOUND IN PARAGRAPHS 1 AND 2 OF ARTICLE 5