Explanatory Notes to the Financial Statements

 
EXPLANATORY NOTES TO FINANCIAL STATEMENTS – JUNE 30, 2002
(in R$ thousands)
 
 
Note 1 – THE BANCO CENTRAL AND ITS DUTIES
 
The Banco Central do Brasil, a federal government agency member of the National Financial System, was established on 12.31.1964 under Law 4,595 to be the agent of the Brazilian society in promoting the stability of the purchasing power of the currency and of the National Financial System.
 
 

Note 2 – MAIN ACCOUNTING GUIDELINES

 
(a) presentation:
The financial statements are prepared in accordance with legislation applicable to the Banco Central do Brasil, especially Law 4,595/64 – which grants the National Monetary Council (CMN) powers to take decisions on the Banco Central balance sheets, interim balance sheets and its internal accounting system, without affecting the authority of the Federal Audit Court – and also Provisional Measure 2,179/2001 and Supplementary Law 101/2000 (Fiscal Responsibility Law) which define the allocation of the Banco Central’s results.
 
In order to ensure that the Banco Central accounting system is consistent with best international practice, the CMN determined a comprehensive review of the Banco Central’s accounting policies, beginning with the financial statements of June 30, 2002 and to be completed with the statements of December 31, 2003;
 
(b) accounting system:
Revenues and expenses are recorded on an accrual basis under Law 4,595/64. As of the this current balance sheet, all exceptions have been eliminated, since it became evident that it was possible to account for the Banco Central administrative expense on an accrual basis whilst still complying with the provisions of the Fiscal Responsibility Law, since these expenses will only be paid when and if included in the Federal General Budget;
 
(c) exchange rate restatement of foreign currency assets and liabilities:
 
 
 
Rights and obligations expressed in foreign currency are adjusted at the exchange rates prevailing at the balance sheet date, with the purchase rate used to restate assets and the sale rate to restate liabilities. The exchange rates for the Brazilian Real against the main currencies are:
 
Currency/Asset
06.30.2002
06.30.2001
Purchase
Sale
Purchase
Sale
United States Dollar
2,8436
2,8444
2,3041
2,3049
Euro
2,8180
2,8245
1,9587
1,9636
Yen
0,0237
0,0238
0,0184
0,0185
SDR
3,7757
3,7919
2,8644
2,8768
Gold (gram)
29,2323
29,3658
20,7511
20,8490
 
(d) assessment of foreign currency securities and gold operations:
These assets, when purchased, are recorded at cost and are assessed on a daily basis with reference to data available from the main sources of international information;
 
(e) assessment of federal public securities:
The Banco Central security portfolio is classified between “securities held for trading” and “securities held to maturity”. Securities held to maturity are stated at restated cost, while those held for trading are stated at their market value based on the following criteria:
National Treasury Bills – LTN are valued based on secondary market prices;
National Treasury Notes Series D – NTN-D and National Treasury Financing Bills – LFT are valued at the arithmetic average of prices published by the National Association of Open Market Institutions (ANDIMA);
Securities issued by the Banco Central are stated at the value of the security curve.
 
(f) assessment of assets at their present value:
Financial assets that are not sufficiently liquid are valued at the flow adjusted to present value, based on the following criteria:
Financial assets linked to price indices or to the Reference Rate (TR) are discounted using the rates of the secondary market for similar securities issued by the National Treasury, weighted appropriately by the quantities traded; and
If similar securities do not exist, the Par Bond yield with the same maturity is used, discounted from an estimated long-term inflation rate for the United States.
 
(g) allowance for credit losses:
The criteria for recording the allowance are as follows:
When a credit is deemed difficult to receive, the allowance is made for the difference between the accounting value and the value likely to be received;
When a supervening fact lowers the debt’s market value, the allowance is made for the difference between the accounting and the market values.
Therefore, allowances related to credits with institutions under extra-judicial liquidation are made based on the difference between the value of the operation and the value of the total assets of such institutions, assessed, whenever possible, at market value, taking into consideration the Banco Central’s position in the order of preference;
 
(h) depreciation:
Fixed assets are recorded at acquisition cost. A revaluation took place in 1994, including the corresponding constitution of reserves. The depreciation is calculated using the straight-line method based on the following criteria:
I. Fixture and fittings:
Data processing equipment, vehicles and tools – 20% p.a.;
Other equipment, facilities and permanent materials – 10% p.a.;
Library and museum collections and works of art are not depreciated;
II. Real estate properties (except land), are 100% depreciated over 62.5 years at an annual depreciation rate calculated according to the remaining useful life of the property.
 
 
Note 3 - FOREIGN SECTOR OPERATIONS
 
The Banco Central, as the depositary of gold, foreign currencies and Special Drawing Rights (SDR), which comprises the Brazilian official reserves, acts to ensure the regular operation of the foreign exchange market, to maintain relative stability of foreign exchange rates, and to keep the balance of payments in equilibrium. For this purpose, the Banco Central may trade gold and foreign currencies, as well as perform credit operations abroad. In managing such reserves, the Banco Central seeks to minimize Brazilian government foreign exchange exposure, hedging the sovereign external debt while constituting its investment portfolio.
 
A conservative approach is adopted, typical of a Banco Central, whereby the Brazilian international reserves are invested in a low maturity portfolio, with a duration of approximately one year. Money-market investments (time and very short term deposits) are made with maturities of up to six months and operations with securities feature an average duration of 1.8 years.
 
Forward operations – purchase of foreign currency in the future with a term of more than two days – are used by the Banco Central to adjust its hedge position among different currencies. Line operations with United States Dollars – sale of foreign currency with repurchase commitment – are used as an instrument of foreign exchange policy.
 
Risk management of such operations is concentrated in assessment and control of the following segments:
(a) market risk – active management of international reserves is monitored on a daily basis using the concept of Value at Risk (VaR) method. The model used to calculate VaR is based on RiskMetrics, originally developed by JPMorgan, with a level of confidence of 95%. The Board of Governors has authorized deviations from the reference portfolio within the defined VaR, in order to take advantage of market opportunities as they appear;
(b) credit risks – investments in money market and securities have to comply with the risk classification limits of institutions and of maximum concentration by counterpart. The minimum long-term rating currently used is “A” according to the rating by Moody’s, and the maximum limit by counterpart changes according to the size of the institution, limited to a value determined by the Board of Governors. Operations with institutions classified with a risk rating of less than “A” are made based on specific authorization from the Board of Governors. For operations with securities, authorized issuers are also selected according to their risk rating; and
(c) liquidity risk – there are limits as to the total amount that may be acquired from a given issue, and for the maximum amount of each issue that can be held in the total portfolio, in order to ensure that the papers acquired may be traded in the secondary market at low cost.
In order to manage the international reserves, the Banco Central relies on computerized systems that control all of the steps of each operation, from contracting to recording, control and financial settlement. In addition, operating limits are controlled on a daily basis and the Board of Governors is automatically informed whenever an authorized limit is exceeded.
Since the Banco Central also acts as a Government agent in the relationship with international organizations and other Banco Centrals, the following are recorded in the Banco Central accounting books:
(a) agreements in foreign currency (Reciprocal Payment and Credit Agreement – CCR and Brazil-Hungary Adjustment) are executed among the Banco Central do Brasil and central banks of member countries (Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Dominican Republic, Uruguay and Venezuela, in the case of CCR) for the purpose of facilitating the channeling of payments, intensifying economic relations among member countries, reducing international flow of funds among member countries and encouraging relations among financial institutions. The same interest rates are used for assets and liabilities operations. The four-month Libor is used for CCR and the three months Libor for Brazil-Hungary Adjustment;
(b) obligations with the IMF result from withdrawals made by the Brazilian Government within the context of the Financial Assistance Program; deposits that the Fund keeps in the country according to its investment policies; and SDR allocations, which are loans linked to the quotas paid-in in foreign currencies;
(c) Deposits from International Financial Organizations correspond to available funds kept in the country by multilateral organizations (mainly IBRD and IADB) for the purpose of covering their respective administrative and operating expenses;
(d) the Brazilian Financing Plan – PBF corresponds to that part of the Brazilian external debt that has been renegotiated with international private banks and the Paris Club; (e) the values reported as excess in the purchased position refer to deposits made by banks for amount in excess of the authorized limit for contracting foreign exchange operations. Values reported as “Contracted Operations – to be Settled” are the corresponding entries for operations recorded to asset accounts normally with two days difference between the contracting and settlement dates. The following tables show foreign assets and liabilities grouped according to maturity terms, currencies, risk rating, counterpart and country or geographic area. It should be noted that the data originate from accounting and managerial information.   (a) Operations segregated by maturity:   as of 06.30.2002  
FOREIGN ASSETS
Maturity Term (Days)
Total
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
Available Cash
113.991
    -
    -
    -
    -
    -
113.991
Monetary Gold
418.889
    -
    -
    -
    -
    -
418.889
Deposits
23.452.839
18.272.048
5.799.198
6.202.940
3.377.020
    -
57.104.045
        - Very short-term
9.513.752
    -
    -
    -
    -
    -
9.513.752
        - Fixed Term
13.939.087
18.024.893
5.540.964
6.128.288
3.377.020
    -
47.010.252
        - Gold
    -
247.155
258.234
74.652
    -
    -
580.041
Securities
    -
568.199
    -
    -
3.980.516
59.166.103
63.714.818
        - Bills
    -
568.199
    -
    -
    -
    -
568.199
        - Notes
    -
    -
    -
    -
    -
52.471.444
52.471.444
        - Bonds
    -
    -
    -
    -
    -
254.030
254.030
        - Brazilian Foreign Debt
    -
    -
    -
    -
    -
6.440.629
6.440.629
        - Under External Management
    -
    -
    -
    -
3.980.516
    -
3.980.516
Agreements in Foreign Currencies
    -
    -
    -
122.106
    -
    -
122.106
Forward Operations
305.588
    -
771.420
94.944
    -
    -
1.171.952
Line Operations in USD
909.952
1.236.966
    -
    -
    -
    -
2.146.918
Operations to be Settled
5.188.237
    -
    -
    -
    -
    -
5.188.237
Other
    -
    -
65.468
2.466
24.777
13
92.724
 
Total Foreign Assets
30.389.496
20.077.213
6.636.086
6.422.456
7.382.313
59.166.116
130.073.680
  as of 06.30.2002  
FOREIGN LIABILITIES
Maturity Term (Days)
 
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
Total
International Monetary Fund - IMF
1.945
    -
154.176
203.136
203.136
53.764.713
54.327.106
        - Financial Assistance Program
    -
    -
154.176
203.136
203.136
40.887.932
41.448.380
        - Deposits
1.945
    -
    -
    -
    -
11.512.679
11.514.624
        - SDR Allocations
    -
    -
    -
    -
    -
1.364.102
1.364.102
Brazilian Financing Plan
    -
    -
2
191.271
177.188
1.730.990
2.099.451
International Financial Organization Deposits
307.547
    -
    -
    -
    -
    -
307.547
Agreements in Foreign Currencies
3.271
    -
    -
76.246
    -
78.125
157.642
Forward Operations
298.548
    -
769.509
96.054
    -
    -
1.164.111
Operations to be Settled
5.188.636
    -
    -
    -
    -
    -
5.188.636
Excess Purchased Position
1.895.813
    -
    -
    -
    -
    -
1.895.813
Other
5.273
    -
37.778
2.466
24.764
58.250
128.531
 
Total Foreign Liabilities
7.701.033
    -
961.465
569.173
405.088
55.632.078
65.268.837
  as of 06.30.2001  
FOREIGN ASSETS
Maturity Term (Days)
 
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
Total
Available Cash
35.491
    -
    -
    -
    -
    -
35.491
Monetary Gold
441.318
    -
    -
    -
    -
    -
441.318
Deposits
14.704.935
20.012.212
6.994.584
2.046.288
691.230
    -
44.449.249
        - Very short-term
5.727.722
    -
    -
    -
    -
    -
5.727.722
        - Fixed Term
8.977.213
19.912.032
6.866.218
2.009.175
691.230
    -
38.455.868
        - Gold
    -
100.180
128.366
37.113
    -
    -
265.659
Securities
1.273.763
942.409
    -
    -
2.934.623
38.478.927
43.629.722
        - Bills
599.065
942.409
    -
    -
    -
    -
1.541.474
        - Notes
    -
    -
    -
    -
    -
36.814.205
36.814.205
        - Bonds
    -
    -
    -
    -
    -
156.794
156.794
        - Brazilian Foreign Debt
    -
    -
    -
    -
    -
1.507.928
1.507.928
        - Under External Management
    -
    -
    -
    -
2.934.623
    -
2.934.623
        - Repurchase Operations
674.698
    -
    -
    -
    -
    -
674.698
Agreements in Foreign Currencies
    -
    -
    -
155.678
    -
    -
155.678
Operations to be Settled
2.314.912
    -
    -
    -
    -
    -
2.314.912
Credits with Countries
    -
    -
    -
    -
253.554
5.497.890
5.751.444
Other
    -
3.574
33.079
2.006
29.068
16.100
83.827
 
Total Foreign Assets
18.770.419
20.958.195
7.027.663
2.203.972
3.908.475
43.992.917
96.861.641
  as of 06.30.2001  
FOREIGN LIABILITIES
Maturity Term (Days)
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
Total
International Monetary Fund - IMF
1.937
    -
20.462
    -
    -
18.385.036
18.407.435
        - Financial Assistance Program
    -
    -
16.996
    -
    -
8.510.700
8.527.696
        - Deposits
1.937
    -
    -
    -
    -
8.842.500
8.844.437
        - SDR Allocations
    -
    -
3.466
    -
    -
1.031.836
1.035.302
Brazilian Financing Plan
    -
    -
    -
177.152
135.114
1.683.312
1.995.578
Agreements in Foreign Currency
2.084
    -
    -
129.394
    -
61.771
193.249
International Financial Organizations Deposits
270.255
    -
    -
    -
    -
    -
270.255
Operations to be Settled
2.315.928
    -
    -
    -
    -
    -
2.315.928
Excess Purchased Position
654.551
    -
    -
    -
    -
    -
654.551
Repuchase Operations
1.837.699
    -
    -
    -
    -
    -
1.837.699
Other
7.022
    -
    -
2.630
28.083
60.223
97.958
 
Total Foreign Liabilities
5.089.476
    -
20.462
309.176
163.197
20.190.342
25.772.653
  (b) Operations segregated by currency:   as of 06.30.2002  
FOREIGN ASSETS
Currency
  Total
US Dollar
Euro
Yen
SDR
Gold
Other (*)
Available Cash
42.597
1.592
764
39.142
    -
29.896
113.991
Monetary Gold
    -
    -
    -
    -
418.889
    -
418.889
Deposits
47.429.384
2.448.481
6.646.139
    -
580.041
    -
57.104.045
        - Very short-term
9.419.612
94.140
    -
    -
    -
    -
9.513.752
        - Fixed Term
38.009.772
2.354.341
6.646.139
    -
    -
    -
47.010.252
        - Gold
    -
    -
    -
    -
580.041
    -
580.041
Securities
51.796.649
11.918.169
    -
    -
    -
    -
63.714.818
        - Bills
568.199
    -
    -
    -
    -
    -
568.199
        - Notes
41.029.844
11.441.600
    -
    -
    -
    -
52.471.444
        - Bonds
    -
254.030
    -
    -
    -
    -
254.030
        - Brazilian Foreign Debt
6.218.090
222.539
    -
    -
    -
    -
6.440.629
        - Under External Management
3.980.516
    -
    -
    -
    -
    -
3.980.516
Agreements in Foreign Currencies
122.106
    -
    -
    -
    -
    -
122.106
Forward Operations
    -
56.360
1.115.592
    -
    -
    -
1.171.952
Line Operations in USD
2.146.918
    -
    -
    -
    -
    -
2.146.918
Operations to be Settled
4.226.434
727.854
54.592
    -
    -
179.357
5.188.237
Other
27.255
    -
    -
    -
    -
65.469
92.724
 
Total Foreign Assets
105.791.343
15.152.456
7.817.087
39.142
998.930
274.722
130.073.680
  (*) Mainly Pound Sterling and Swiss Franc.   as of 06.30.2002  
FOREIGN LIABILITIES
Currency
  Total
US Dollar
Euro
Yen
SDR
Gold
Other
International Monetary Fund - IMF
    -
    -
    -
54.325.161
    -
1.945
54.327.106
        - Financial Assistance Program
    -
    -
    -
41.448.380
    -
    -
41.448.380
        - Deposits
    -
    -
    -
11.512.679
    -
1.945
11.514.624
        - SDR Allocations
    -
    -
    -
1.364.102
    -
    -
1.364.102
Brazilian Financing Plan
2.086.732
4.294
    -
    -
    -
8.425
2.099.451
International Financial Organizations Deposits
307.472
    -
    -
    -
    -
75
307.547
Agreements in Foreign Currencies
157.642
    -
    -
    -
    -
    -
157.642
Forward Operations
1.164.111
    -
    -
    -
    -
    -
1.164.111
Operations to be Settled
4.548.367
640.269
    -
    -
    -
    -
5.188.636
Excess Purchased Position
1.895.813
    -
    -
    -
    -
    -
1.895.813
Other
128.530
1
    -
    -
    -
    -
128.531
 
Total Foreign Liabilities
10.288.667
644.564
    -
54.325.161
    -
10.445
65.268.837
  as of 06.30.2001  
FOREIGN ASSETS
Currency
Total
US Dollar
Euro
Yen
SDR
Gold
Other (*)
Available Cash
16.629
2.570
29
12.074
    -
4.189
35.491
Monetary Gold
    -
    -
    -
    -
441.318
    -
441.318
Deposits
36.612.479
3.561.604
3.321.949
    -
265.659
687.558
44.449.249
        - Very short-term
5.665.468
    -
12.455
    -
    -
49.799
5.727.722
        - Fixed Term
30.947.011
3.561.604
3.309.494
    -
    -
637.759
38.455.868
        - Gold
    -
    -
    -
    -
265.659
    -
265.659
Securities
35.795.022
7.834.700
    -
    -
    -
    -
43.629.722
        - Bills
1.541.474
    -
    -
    -
    -
    -
1.541.474
        - Notes
29.136.299
7.677.906
    -
    -
    -
    -
36.814.205
        - Bonds
    -
156.794
    -
    -
    -
    -
156.794
        - Brazilian Foreign Debt
1.507.928
    -
    -
    -
    -
    -
1.507.928
        - Under External Management
2.934.623
    -
    -
    -
    -
    -
2.934.623
        - Repurchase Commitments
674.698
    -
    -
    -
    -
    -
674.698
Foreign Currencies Agreements
155.678
    -
    -
    -
    -
    -
155.678
Operations to be Settled
2.195.033
    -
119.879
    -
    -
    -
2.314.912
Credits with Countries
5.751.444
    -
    -
    -
    -
    -
5.751.444
Other
67.737
    -
    -
    -
    -
16.090
83.827
 
Total Foreign Assets
80.594.022
11.398.874
3.441.857
12.074
706.977
707.837
96.861.641
  (*) Mainly Pound Sterling and Swiss Franc and Canadian Dollar.   as of 06.30.2001  
FOREIGN LIABILITIES
Currency
Total
US Dollar
Euro
Yen
SDR
Gold
Other
International Monetary Fund - IMF
    -
    -
    -
18.405.498
    -
1.937
18.407.435
        - Financial Assistance Program
    -
    -
    -
8.527.696
    -
    -
8.527.696
        - Deposits
    -
    -
    -
8.842.500
    -
1.937
8.844.437
        - SDR Allocations
    -
    -
    -
1.035.302
    -
    -
1.035.302
Brazilian Financing Plan
1.985.940
    -
    -
    -
    -
9.638
1.995.578
Foreign Currency Agreements
193.249
    -
    -
    -
    -
    -
193.249
International Financial Organizations Deposits
268.088
    -
    -
    -
    -
2.167
270.255
Operations to be Settled
2.195.795
    -
120.133
    -
    -
    -
2.315.928
Excess Purchased Position
654.551
    -
    -
    -
    -
    -
654.551
Repurchase Commitments
1.837.699
    -
    -
    -
    -
    -
1.837.699
Other
97.958
    -
    -
    -
    -
    -
97.958
 
Total Foreign Liabilities
7.233.280
    -
120.133
18.405.498
    -
13.742
25.772.653
  (c) Operations segregated by currency and maturity   as of 06.30.2002  
FOREIGN ASSETS
Maturity Term (Days)
  Total
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
US Dollar
27.283.358
16.933.031
3.751.114
4.573.451
6.002.443
47.247.946
105.791.343
Euro
2.093.918
1.140.368
    -
    -
    -
11.918.170
15.152.456
Yen
344.936
1.756.659
2.561.270
1.774.352
1.379.870
    -
7.817.087
SDR
39.142
    -
    -
    -
    -
    -
39.142
Gold
418.889
247.155
258.233
74.653
    -
    -
998.930
Other
209.253
    -
65.469
    -
    -
    -
274.722
 
Total Foreign Assets
30.389.496
20.077.213
6.636.086
6.422.456
7.382.313
59.166.116
130.073.680
  as of 06.30.2002  
FOREIGN LIABILITIES
Maturity Term (Days)
  Total
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
US Dollar
7.058.744
    -
807.287
366.033
201.948
1.854.655
10.288.667
Euro
640.269
    -
2
4
4
4.285
644.564
SDR
    -
    -
154.176
203.136
203.136
53.764.713
54.325.161
Other
2.020
    -
    -
    -
    -
8.425
10.445
 
Total Foreign Liabilities
7.701.033
    -
961.465
569.173
405.088
55.632.078
65.268.837
  as of 06.30.2001  
FOREIGN ASSETS
Maturity Term (Days)
Total
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
US Dollar
17.063.804
16.696.895
5.521.602
1.952.349
3.217.245
36.142.127
80.594.022
Euro
429.113
2.281.644
853.417
    -
    -
7.834.700
11.398.874
Yen
132.363
1.879.476
524.278
214.510
691.230
    -
3.441.857
SDR
12.074
    -
    -
    -
    -
    -
12.074
Gold
441.318
100.180
128.366
37.113
    -
    -
706.977
Other (*)
691.747
    -
    -
    -
    -
16.090
707.837
 
Total Foreign Assets
18.770.419
20.958.195
7.027.663
2.203.972
3.908.475
43.992.917
96.861.641
  (*) Mainly Swiss Franc, Pound Sterling and Canadian Dollar.   as of 06.30.2001  
FOREIGN LIABILITIES
Maturity Term (Days)
Total
0 to 7
8 to 30
31 to 60
61 to 90
91 to 180
> 180
US Dollar
4.965.239
    -
    -
309.173
163.195
1.795.673
7.233.280
Euro
    -
    -
    -
    -
    -
    -
    -
Yen
120.133
    -
    -
    -
    -
    -
120.133
SDR
    -
    -
20.462
    -
    -
18.385.036
18.405.498
Other
4.104
    -
    -
3
2
9.633
13.742
 
Total Foreign Liabilities
5.089.476
    -
20.462
309.176
163.197
20.190.342
25.772.653
 
(d) Operations segregated by risk rating
 
as of 06.30.2002  
FOREIGN ASSETS
RISK RATING
  Total
AAA
AA+
AA
AA-
A+
A
Other (*)
Available Cash
34.202
    -
    -
    -
    -
    -
79.789
113.991
Monetary Gold
418.889
    -
    -
    -
    -
    -
    -
418.889
Deposits
12.226.768
6.567.324
8.914.149
15.700.966
4.800.808
7.828.803
1.065.227
57.104.045
        - Very short-term
810.271
844.272
1.287.873
3.477.257
543.769
2.324.467
225.843
9.513.752
        - Fixed Term
10.836.456
5.723.052
7.626.276
12.223.709
4.257.039
5.504.336
839.384
47.010.252
        - Gold
580.041
    -
    -
    -
    -
    -
    -
580.041
Securities
57.274.189
    -
    -
    -
    -
    -
6.440.629
63.714.818
        - Bills
568.199
    -
    -
    -
    -
    -
    -
568.199
        - Notes
52.471.444
    -
    -
    -
    -
    -
    -
52.471.444
        - Bonds
254.030
    -
    -
    -
    -
    -
    -
254.030
        - Brazilian Foreign Debt
    -
    -
    -
    -
    -
    -
6.440.629
6.440.629
        - Under External Management
3.980.516
    -
    -
    -
    -
    -
    -
3.980.516
Foreign Currencies Agreements
    -
    -
    -
    -
    -
    -
122.106
122.106
Forward Operations
1.171.952
    -
    -
    -
    -
    -
    -
1.171.952
Line Operations in USD(**)
    -
 
 
 
    -
    -
2.146.918
2.146.918
Operations to be Settled
1.907.706
269.301
1.389.588
1.621.642
    -
    -
    -
5.188.237
Other
    -
    -
    -
    -
    -
    -
92.724
92.724
 
Total Foreign Assets
73.033.706
6.836.625
10.303.737
17.322.608
4.800.808
7.828.803
9.947.393
130.073.680
  (*)Very short term and fixed term operations registered in "Other" include, mainly, Banco do Brasil, Bladex and Bamb. (**)Operations undertaken in the domestic market and not rated.   as of 06.30.2001  
FOREIGN ASSETS
RISK RATING
Total
AAA
AA+
AA
AA-
A+
A
Other (*)
Available Cash
27.350
    -
    -
    -
    -
    -
8.141
35.491
Monetary Gold
19.968
    -
    -
    -
    -
    -
421.350
441.318
Deposits
8.907.162
2.997.341
6.426.300
12.569.094
3.719.005
5.686.352
4.143.995
44.449.249
        - Very short-term
2.100.030
    -
24.147
1.387.186
18.496
1.040.390
1.157.473
5.727.722
        - Fixed Term
6.541.473
2.997.341
6.402.153
11.181.908
3.700.509
4.645.962
2.986.522
38.455.868
        - Gold
265.659
    -
    -
    -
    -
    -
    -
265.659
Securities
42.121.794
    -
    -
    -
    -
    -
1.507.928
43.629.722
        - Bills
1.541.474
    -
    -
    -
    -
    -
    -
1.541.474
        - Notes
36.814.205
    -
    -
    -
    -
    -
    -
36.814.205
        - Bonds
156.794
    -
    -
    -
    -
    -
    -
156.794
        - Brazilian Foreign Debt
    -
    -
    -
    -
    -
    -
1.507.928
1.507.928
        - Under External Management
2.934.623
    -
    -
    -
    -
    -
    -
2.934.623
        - Repurchase Operations
674.698
    -
    -
    -
    -
    -
    -
674.698
Agreements in Foreign Currencies
    -
    -
    -
    -
    -
    -
155.678
155.678
Operations to be Settled
2.314.912
    -
    -
    -
    -
    -
    -
2.314.912
Credits with Countries (**)
    -
    -
    -
    -
    -
    -
5.751.444
5.751.444
Other
    -
    -
    -
    -
    -
10
83.817
83.827
 
Total Foreign Assets
53.391.186
2.997.341
6.426.300
12.569.094
3.719.005
5.686.362
12.072.353
96.861.641
  (*) Very short term and fixed term operations registered in "Other" include, mainly, Banco do Brasil, Bladex and Bamb. (**) Refers to a credit with Poland, negotiated with the National Treasury in October 2001.   (e) Operations segregated by country or geographic area   as of 06.30.2002  
FOREIGN ASSETS
Country or Geographic Area
  Total
USA and Canada
European Union
United Kingdom
Brazil
Other(*)
Available Cash
34.202
    -
    -
23.659
56.130
113.991
Monetary Gold
    -
    -
19.968
398.921
    -
418.889
Deposits
16.977.616
27.336.044
7.413.981
0
5.376.404
57.104.045
        - Very short-term
4.343.461
4.598.391
571.900
    -
    -
9.513.752
        - Fixed Term
12.054.114
22.737.653
6.842.081
    -
5.376.404
47.010.252
        - Gold
580.041
    -
    -
    -
    -
580.041
Securities
41.496.685
11.796.988
3.980.516
6.440.629
    -
63.714.818
        - Bills
568.199
    -
    -
    -
    -
568.199
        - Notes
40.928.486
11.542.958
    -
    -
    -
52.471.444
        - Bonds
    -
254.030
    -
    -
    -
254.030
        - Brazilian Foreign Debt
    -
    -
    -
6.440.629
    -
6.440.629
        - Under External Management
    -
    -
3.980.516
    -
    -
3.980.516
Agreements in Foreign Currencies
    -
    -
    -
    -
122.106
122.106
Forward Operations
880.988
93.771
197.193
    -
    -
1.171.952
Line Operations in USD (**)
    -
    -
    -
2.146.918
    -
2.146.918
Operations to be Settled
3.029.518
1.528.552
630.167
    -
    -
5.188.237
Other
    -
    -
    -
    -
92.724
92.724
 
Total Foreign Assets
62.419.009
40.755.355
12.241.825
9.010.127
5.647.364
130.073.680
  (*) Fixed term operations registered in "Other" include, mainly, Switzerland.   as of 06.30.2002  
FOREIGN LIABILITIES
Country or Geographic Area
  Total
USA and Canada
European Union
United Kingdom
Brazil
Other
International Monetary Fund - IMF
54.325.161
    -
    -
1.945
    -
54.327.106
        - Financial Assistance Program
41.448.380
    -
    -
    -
    -
41.448.380
        - Deposits
11.512.679
    -
    -
1.945
    -
11.514.624
        - SDR Allocations
1.364.102
    -
    -
    -
    -
1.364.102
Brazilian Financing Plan
2.095.155
4.294
2
    -
    -
2.099.451
International Financial Organization Deposits
307.547
    -
    -
    -
    -
307.547
Agreements in Foreign Currency
    -
    -
    -
    -
157.642
157.642
Forward Operations
873.064
93.798
197.249
    -
    -
1.164.111
Operations to be Settled
3.029.752
1.528.669
630.215
    -
    -
5.188.636
Excess Purchased Position
    -
    -
    -
1.895.813
    -
1.895.813
Other
97.051
    -
989
30.491
    -
128.531
 
Total Foreign Liabilities
60.727.730
1.626.761
828.455
1.928.249
157.642
65.268.837
  as of 06.30.2001  
FOREIGN ASSETS
Country or Geographic Area
Total
USA and Canada
European Union
United Kingdom
Brazil
Other (*)
Available Cash
16.390
16.711
1.879
511
    -
35.491
Monetary Gold
    -
    -
19.968
360.999
60.351
441.318
Deposits
16.395.972
19.585.478
7.537.963
    -
929.836
44.449.249
        - Very short-term
2.556.205
2.920.428
251.089
    -
    -
5.727.722
        - Fixed Term
13.606.445
16.665.050
7.254.537
    -
929.836
38.455.868
        - Gold
233.322
    -
32.337
    -
    -
265.659
Securities
29.999.410
9.187.761
2.934.623
1.507.928
    -
43.629.722
        - Bills
1.541.474
    -
    -
    -
    -
1.541.474
        - Notes
27.783.238
9.030.967
    -
    -
    -
36.814.205
        - Bonds
    -
156.794
    -
    -
    -
156.794
        - Brazilian Foreign Debt
    -
    -
    -
1.507.928
    -
1.507.928
        - Under External Management
    -
    -
2.934.623
    -
    -
2.934.623
        - Repurchase Operations
674.698
    -
    -
    -
    -
674.698
Agreements in Foreign Currencies
    -
    -
    -
    -
155.678
155.678
Operations to be Settled
1.757.254
557.658
    -
    -
    -
2.314.912
Credits with Countries (**)
    -
    -
    -
    -
5.751.444
5.751.444
Other
    -
    -
    -
16.090
67.737
83.827
 
Total Foreign Assets
48.169.026
29.347.608
10.494.433
1.885.528
6.965.046
96.861.641
  (*) Includes operations with Bladex and Bamb. (**) Refers to a credit with Poland, negotiated with the National Treasury in October 2001.   as of 06.30.2001  
FOREIGN LIABILITIES
Country or Geographic Area
Total
USA and Canada
European Union
United Kingdom
Brazil
Other (*)
International Monetary Fund - IMF
18.407.435
    -
    -
    -
    -
18.407.435
        - Financial Assistance Program
8.527.696
    -
    -
    -
    -
8.527.696
        - Deposits
8.844.437
    -
    -
    -
    -
8.844.437
        - SDR Allocations
1.035.302
    -
    -
    -
    -
1.035.302
Brazilian Financing Plan
1.992.585
    -
    -
    -
2.993
1.995.578
Agreements in Foreign Currency
    -
    -
    -
    -
193.249
193.249
Intl. Financial Org. Deposits
270.255
    -
    -
    -
    -
270.255
Operations to be Settled
1.757.864
558.064
    -
    -
    -
2.315.928
Excess Purchased Position
    -
    -
    -
654.551
    -
654.551
Repurchase Operations
1.837.699
    -
    -
    -
    -
1.837.699
Other
60.847
    -
3.721
3.302
30.088
97.958
 
Total Foreign Liabilities
24.326.685
558.064
3.721
657.853
226.330
25.772.653
  (f) Operations segregated by counterpart   as of 06.30.2002  
FOREIGN ASSETS
Counterparts
  Total
Financial
Countries
Supranational
 
Institutions
Treasury
Agencies
Institutions
Other (*)
Available Cash
73.181
1.207
    -
15.944
23.659
113.991
Monetary Gold
105.128
    -
    -
    -
313.761
418.889
Deposits
51.840.693
284.360
    -
4.978.992
    -
57.104.045
        - Very short-term
9.229.392
284.360
    -
    -
    -
9.513.752
        - Fixed Term
42.031.260
    -
    -
4.978.992
    -
47.010.252
        - Gold
580.041
    -
    -
    -
    -
580.041
Securities
3.315.888
50.587.697
6.273.932
3.537.301
    -
63.714.818
        - Bills
    -
568.199
    -
    -
    -
568.199
        - Notes
    -
43.324.839
6.273.932
2.872.673
    -
52.471.444
        - Bonds
    -
254.030
    -
    -
    -
254.030
        - Brazilian Foreign Debt
    -
6.440.629
    -
    -
    -
6.440.629
        - Under External Management
3.315.888
    -
    -
664.628
    -
3.980.516
Agreements in Foreign Currencies
    -
    -
    -
    -
122.106
122.106
Forward Operations
1.171.952
    -
    -
    -
    -
1.171.952
Line Operations in USD
2.146.918
    -
    -
    -
    -
2.146.918
Operations to be Settled
5.188.237
    -
    -
    -
    -
5.188.237
Other
27.242
    -
    -
    -
65.482
92.724
 
Total Foreign Assets
63.869.239
50.873.264
6.273.932
8.532.237
525.008
130.073.680
  (*) Includes available cash with the Banco Central do Brasil.   as of 06.30.2002  
FOREIGN LIABILITIES
Counterparts
  Total
Financial
Countries
Supranational
Other
Institutions
Treasury
Agencies
Institutions
International Monetary Fund - IMF
    -
    -
    -
54.325.161
1.945
54.327.106
        - Financial Assistance Program
    -
    -
    -
41.448.380
    -
41.448.380
        - Deposits
    -
    -
    -
11.512.679
1.945
11.514.624
        - SDR Allocations
    -
    -
    -
1.364.102
    -
1.364.102
Brazilian Financing Plan
2.086.780
    -
12.671
    -
    -
2.099.451
Intl. Financial Org. Deposits
    -
    -
    -
307.547
    -
307.547
Agreements in Foreign Currency
    -
    -
    -
    -
157.642
157.642
Forward Operations
1.164.111
    -
    -
    -
    -
1.164.111
Operations to be Settled
5.188.636
    -
    -
    -
    -
5.188.636
Excess Purchased Position
1.895.813
    -
    -
    -
    -
1.895.813
Other
32.503
    -
    -
58.250
37.778
128.531
 
Total Foreign Liabilities
10.367.843
    -
12.671
54.690.958
197.365
65.268.837
  as of 06.30.2001  
FOREIGN ASSETS
Counterparts
  Total
Financial
Countries
Supranational
Other (*)
Institutions
Treasury
Agencies
Institutions
Available Cash
22.028
138
    -
12.814
511
35.491
Monetary Gold
80.319
    -
    -
    -
360.999
441.318
Deposits
42.950.184
230.410
    -
1.268.655
    -
44.449.249
        - Very short-term
5.497.312
230.410
    -
    -
    -
5.727.722
        - Fixed Term
37.187.213
    -
    -
1.268.655
    -
38.455.868
        - Gold
265.659
    -
    -
    -
    -
265.659
Securities
2.934.623
30.412.761
5.794.320
4.488.018
    -
43.629.722
        - Bills
    -
    -
    -
1.541.474
    -
1.541.474
        - Notes
    -
28.073.341
5.794.320
2.946.544
    -
36.814.205
        - Bonds
    -
156.794
    -
    -
    -
156.794
        - Brazilian Foreign Debt
    -
1.507.928
    -
    -
    -
1.507.928
        - Under External Management
2.934.623
    -
    -
    -
    -
2.934.623
        - Repurchase Operations
    -
674.698
    -
    -
    -
674.698
Agreements in Foreign Currencies
    -
    -
    -
    -
155.678
155.678
Operations to be Settled
2.314.912
    -
    -
    -
    -
2.314.912
Credits with Countries
    -
    -
5.751.444
    -
    -
5.751.444
Other
41.569
    -
    -
    -
42.258
83.827
 
Total Foreign Assets
48.343.635
30.643.309
11.545.764
5.769.487
559.446
96.861.641
  (*) Includes available cash with the Banco Central do Brasil.   as of 06.30.2001  
FOREIGN LIABILITIES
Counterparts
  Total
Financial
Countries
Supranational
Other
Institutions
Treasury
Agencies
Institutions
International Monetary Fund - IMF
    -
    -
    -
18.407.435
    -
18.407.435
        - Financial Assistance Program
    -
    -
    -
8.527.696
    -
8.527.696
        - Deposits
    -
    -
    -
8.844.437
    -
8.844.437
        - SDR Allocations
    -
    -
    -
1.035.302
    -
1.035.302
Brazilian Financing Plan
1.985.978
    -
9.600
    -
    -
1.995.578
Agreements in Foreign Currency
    -
    -
    -
    -
193.249
193.249
Intl. Financial Org. Deposits
    -
    -
    -
270.255
    -
270.255
Operations to be Settled
2.315.928
    -
    -
    -
    -
2.315.928
Excess Purchased Position
654.551
    -
    -
    -
    -
654.551
Repurchase Operations
1.837.699
    -
    -
    -
    -
1.837.699
Other
37.111
    -
    -
29.863
30.984
97.958
 
Total Foreign Liabilities
6.831.267
    -
9.600
18.707.553
224.233
25.772.653
    Note 4 – FEDERAL PUBLIC SECURITIES For purposes of implementing its monetary policy, the Banco Central uses federal public securities issued by the National Treasury and itself. Since May 05, 2002, in accordance with the Fiscal Responsibility Law, the Banco Central no longer issues securities. The main securities are: (a) National Treasury Bill – LTN, predetermined yield defined by a discount on the purchase price; (b) National Treasury Financing Bill – LFT, predetermined yield defined by the average adjusted rate of daily financing calculated by the Special System for Clearance and Custody – Selic rate; (c) National Treasury Note Series D – NTN-D, updated by the sale exchange rate of the United States Dollar plus half-yearly interests; and (d) Banco Central Note – Special and Floating Series (NBC-E and NBC-F, respectively), updated by the sale exchange rate of the United States Dollar plus half-yearly interests.   In addition to securities used as part of its monetary policy, at June 30 the Banco Central held the following securities: (a) National Treasury Note Series P – NTN-P, nominative and non-negotiable security, updated by the TR plus interest of 6% p.a. payable upon redemption and a minimum term of fifteen years from the date of the financial settlement of the disposal within the context of the National Privatization Program – PND; and (b) securitized credits – CVS, broken down between CVSA, CVSB, CVSC and CVSD; with CVSA and CVSC adjusted by TR + 6.17% p.a., and CVSB and CVSD by TR + 3.12% p.a. capitalized on a monthly basis, and interests paid on a monthly basis from January 01, 2005, and amortization paid as from January 1, 2009, with final maturity in 2027.   (a)Securities segregated by term to maturity:   as of 06.30.2002  
Securities
Term to Maturity (months)
Total
up to 6
7 to 18
19 to 30
31 to 42
>42
Free
21.477.044
54.195.451
35.571.070
14.934.679
44.660.895
170.839.139
 
LTN
Cost
15.509.112
15.480.387
15.819.228
    -
    -
46.808.727
Adjustment(+/-)
(56.362)
(1.047.357)
(2.511.820)
    -
    -
(3.615.539)
Market
15.452.750
14.433.030
13.307.408
    -
    -
43.193.188
 
LFT
Cost
4.891.604
30.688.169
1.906.934
59.482
4.537.155
42.083.344
Adjustment(+/-)
(2.777)
(104.545)
(14.553)
(66)
(44.727)
(166.668)
Market
4.888.827
30.583.624
1.892.381
59.416
4.492.428
41.916.676
 
NTN-D
Cost
1.151.063
9.976.923
22.051.710
15.257.717
39.992.688
88.430.101
Adjustment(+/-)
(15.596)
(798.126)
(1.680.429)
(382.454)
(1.433.330)
(4.309.935)
Market
1.135.467
9.178.797
20.371.281
14.875.263
38.559.358
84.120.166
 
NTN-P
Cost
    -
    -
    -
    -
4.761
4.761
 
CVS
Cost
    -
    -
    -
    -
1.604.348
1.604.348
 
Linked to Repurchase
8.210.445
13.095.560
6.673.239
5.906.469
294.128
34.179.841
 
LTN
Cost
6.922.516
3.303.320
    -
    -
    -
10.225.836
Adjustment(+/-)
(81.820)
(127.430)
    -
    -
    -
(209.250)
Market
6.840.696
3.175.890
    -
    -
    -
10.016.586
 
LFT
Cost
    -
10.038.603
742.360
    -
301.319
11.082.282
Adjustment(+/-)
    -
(118.933)
(10.978)
    -
(7.191)
(137.102)
Market
    -
9.919.670
731.382
    -
294.128
10.945.180
 
NTN-D
Cost
1.375.333
    -
6.398.302
6.080.146
    -
13.853.781
Adjustment(+/-)
(5.584)
    -
(456.445)
(173.677)
    -
(635.706)
Market
1.369.749
    -
5.941.857
5.906.469
    -
13.218.075
 
Guaranties for Swap Operations
    -
1.227.969
    -
    -
2.832.028
4.059.997
 
LFT
Cost
    -
1.233.934
    -
    -
2.922.847
4.156.781
Adjustment(+/-)
    -
(5.965)
    -
    -
(90.819)
(96.784)
Market
    -
1.227.969
    -
    -
2.832.028
4.059.997
 
Total Assets
29.687.489
68.518.980
42.244.309
20.841.148
47.787.051
209.078.977
 
Banco Central Issued
31.368.411
43.695.947
22.006.487
7.793.408
9.370.319
114.234.572
 
NBC-F
1.908.104
    -
    -
    -
    -
1.908.104
NBC-E
29.460.307
43.695.947
22.006.487
7.793.408
9.370.319
112.326.468
 
Total Liabilities
31.368.411
43.695.947
22.006.487
7.793.408
9.370.319
114.234.572
  as of 06.30.2001  
Securities
Term to Maturity (months)
Total
up to 6
7 to 18
19 to 30
31 to 42
>42
Free
23.824.354
14.173.534
15.813.719
10.850.185
87.466.289
152.128.081
 
LTN
Cost
20.834.340
11.360.441
385.634
    -
    -
32.580.415
Adjustment(+/-)
(92.287)
(443.207)
(51.103)
    -
    -
(586.597)
Market
20.742.053
10.917.234
334.531
    -
    -
31.993.818
 
LFT
Cost
3.040.394
3.176.133
15.427.798
6.474.179
5.771.967
33.890.471
Adjustment(+/-)
(1.228)
(5.988)
(34.610)
(19.889)
(23.189)
(84.904)
Market
3.039.166
3.170.145
15.393.188
6.454.290
5.748.778
33.805.567
 
LFT-A
Cost
    -
    -
    -
    -
59.096.836
59.096.836
Adjustment(+/-)
    -
    -
    -
    -
6.421
6.421
Market
    -
    -
    -
    -
59.103.257
59.103.257
 
LFT-B
Cost
43.155
86.311
86.311
86.310
302.140
604.227
Adjustment(+/-)
(20)
(156)
(311)
(465)
(2.842)
(3.794)
Market
43.135
86.155
86.000
85.845
299.298
600.433
 
NTN-D
Cost
    -
    -
    -
4.418.749
19.768.019
24.186.768
Adjustment(+/-)
    -
    -
    -
(108.699)
(318.392)
(427.091)
Market
    -
    -
    -
4.310.050
19.449.627
23.759.677
 
NTN-P
Cost
    -
    -
    -
    -
4.380
4.380
Adjustment(+/-)
    -
    -
    -
    -
(1.385)
(1.385)
Market
    -
    -
    -
    -
2.995
2.995
 
NTN-A10
Cost
    -
    -
    -
    -
1.970.904
1.970.904
 
CVS
Cost
    -
    -
    -
    -
1.478.771
1.478.771
Adjustment(+/-)
    -
    -
    -
    -
(587.341)
(587.341)
Market
    -
    -
    -
    -
891.430
891.430
 
Linked to Repurchase
1.422.185
    -
6.353.317
    -
1.566.577
9.342.079
 
LTN
Cost
1.423.278
    -
385.634
    -
    -
1.808.912
Adjustment(+/-)
(1.093)
    -
(51.103)
    -
    -
(52.196)
Market
1.422.185
    -
334.531
    -
    -
1.756.716
 
LFT
Cost
    -
    -
6.027.617
    -
    -
6.027.617
Adjustment(+/-)
    -
    -
(8.831)
    -
    -
(8.831)
Market
    -
    -
6.018.786
    -
    -
6.018.786
 
LFT-A
Cost
    -
    -
    -
    -
1.566.420
1.566.420
Adjustment(+/-)
    -
    -
    -
    -
157
157
Market
    -
    -
    -
    -
1.566.577
1.566.577
 
Total Assets
25.246.539
14.173.534
22.167.036
10.850.185
89.032.866
161.470.160
 
Banco Central Issued
26.139.979
38.342.180
35.785.766
18.867.228
9.835.173
128.970.326
 
NBC-F
966.323
1.423.940
    -
    -
    -
2.390.263
NBC-E
25.173.656
36.918.240
35.785.766
18.867.228
9.835.173
126.580.063
 
Total Liabilities
26.139.979
38.342.180
35.785.766
18.867.228
9.835.173
128.970.326
  The following comments refer to the above table: I. The replacement of LFT-A, LFT-B and NTN-A10 in the Banco Central portfolio of federal public securities with NTN-D and LTN, was made in accordance with Provisional Measure 2,179 and consistent with the National Treasury Department – STN Directive 190/2002. This replacement resulted in an asset decrease of R$706,450 in LFT, resulting from the difference between the value stated in the Banco Central portfolio and the value accepted by the National Treasury upon replacement; II. The National Treasury covered the negative result reported at  June 2001, through the issue of NTNs-D; and III. The exchange of NTNs-D, with the National Treasury, for credits resulting from the renegotiation  of the Polish debt with the Banco Central, was made in October 2001.
 
(b) Securities segregated by method of assessment:  
SECURITIES
2002
2001
Cost
Adjustment
Market
Cost
Adjustment
Market
Securities for trading
175.788.442
(9.170.984)
166.617.458
163.215.721
(1.745.561)
161.470.160
LTN
57.034.563
(3.824.789)
53.209.774
34.389.327
(638.793)
33.750.534
LFT
57.322.407
(400.554)
56.921.853
39.918.088
(93.735)
39.824.353
LFT-A
    -
    -
    -
60.663.256
6.578
60.669.834
LFT-B
    -
    -
    -
604.227
(3.794)
600.433
NTN-D
61.431.472
(4.945.641)
56.485.831
24.186.768
(427.091)
23.759.677
NTN-A10
    -
    -
    -
1.970.904
    -
1.970.904
NTN-P
    -
    -
    -
4.380
(1.385)
2.995
CVS
    -
    -
    -
1.478.771
(587.341)
891.430
 
Securities to be held to maturity
42.461.519
    -
    -
    -
    -
    -
NTN-D
40.852.410
    -
    -
    -
    -
    -
CVS
1.604.348
    -
    -
    -
    -
    -
NTN-P
4.761
    -
    -
    -
    -
    -
  The portfolio of securities issued by the Treasury, which was entirely "marked to market" was, as from June, classified as “for trading” (valued at market price) and also  “held to maturity” (assessed by the “curve”). This classification aims to ensure that the Banco Central accounting procedures are consistent with international standards. If the "marked to market" criterion were to be maintained for the entire portfolio, an additional expense of R$5,442,237 would have been recorded for the Banco Central’s results for the half-year period, as follows: R$4,823,808 in NTNs-D, R$617,007 in CVS and R$1,422 in NTNs-P;   (c) Swap operations: As authorized by the National Monetary Council, for the purpose of monetary and foreign exchange policies, in April 2002 the Banco Central started to perform swap operations referenced in interest rates and foreign exchange variations. These operations are recorded with the Commodities and Futures Exchange – BM&F, where, for purchased positions, the Banco Central assumes active position in interest rates is represented by the asset for what relates to interest rates, - represented by Interfinancial Deposits – DI -, and passive position in as a liability for what relates to exchange rate variations plus interest rate -, representing a foreign exchange coupon. Conversely, in positions where the Banco Central is sold, it keeps an active position in is on the asset side for foreign exchange variations plus foreign exchange coupon, and a negative one in on the liability side for interest rates (DI).   as of 06.30.2002  
Term to Maturity
Outstanding Contracts
Reference Values (in R$ thousands)
(days)
Purchased
Sold
Purchased
Sold
0 - 180
26.592
-
3.503.271
    -
181 - 360
91.811
-
11.640.517
    -
361 - 720
63.252
25.000
7.037.881
3.020.456
> 720
85.498
55.000
7.971.523
5.667.747
 
Total
267.153
80.000
30.153.192
8.688.203
    Note 5 – REDISCOUNT OPERATIONS   The Banco Central acts in Rediscount trading in “purchase with resale agreement” in intra-day and one-business-day operations. Intra-day operations, with no financial cost, traded a daily average of R$31,609,590 from 04.22.2002, when the Brazilian Payment System was implemented, to 06.30.2002. To June 30, one-business-day operations were remunerated based on the Selic rate plus 1% p.a. As from July 01, 2002, the supplement to the Selic rate for this type of operation has been 6% p.a. The following table below demonstrates the securities used in these operations and the balance at June 30, 2002.  
Rediscount Operations
LFT
2.014.217
LFT-B
1.046
 
Total
2.015.263
    Note 6 – OTHER RECEIVABLES  
 
  06.30.2002
  06.30.2001
Description
  Balance
  Provision
  Balance
  Provision
  1) Instituitions under Liquidation
  Banco Nacional - Extrajudicial Liquidation
14.067.800
(3.258.885)
13.708.769
(4.495.896)
  Banco Econômico - Extrajudicial Liquidation
8.867.588
(2.397.118)
8.641.275
(1.020.103)
  Banco Bamerindus - Extrajudicial Liquidation
2.442.234
(1.129.459)
2.379.904
(1.126.355)
  Banco Pontual - Extrajudicial Liquidation
721.304
(721.304)
766.533
(577.110)
  Banco Mercantil - Extrajudicial Liquidation
486.536
    -
477.108
    -
  Banco Banorte - Extrajudicial Liquidation
557.925
(284.185)
543.686
(282.513)
  Banco do Estado de Alagoas - Extrajudicial Liquidation
331.438
(266.551)
322.979
(255.570)
  Banco Crefisul - Extrajudicial Liquidation
86.337
(71.060)
169.228
(71.772)
  Banco Banfort - Extrajudicial Liquidation
113.022
(86.675)
110.137
(79.143)
  Other institutions under liquidation
100.599
(88.194)
104.785
(80.089)
 
  TOTAL 1
27.774.783
(8.303.431)
27.224.404
(7.988.551)
 
  2) Other Credits
  FCVS
923.702
    -
833.953
    -
  States
4.287.260
    -
4.036.577
    -
  Other Operations
10.074
(5.763)
21.571
(4.843)
 
  TOTAL 2
5.221.036
(5.763)
4.892.101
(4.843)
 
  TOTAL ( 1 + 2 )
32.995.819
(8.309.194)
32.116.505
(7.993.394)
  The following comments refer to the above table: (a) The reduction in the Banco Nacional — Extrajudicial Liquidation provisions is largely due to an adjustment in FCVS, securities that represent a large part of the institution's portfolio, therefore improving its ability to pay; (b) The increase to the provisions of Banco Econômico – Extrajudicial Liquidation was largely due to the devaluation of foreign exchange securities included as part of this  institution’s portfolio; (c) The provision of 100% of Banco Pontual – Extrajudicial Liquidation was the result  of a declaration, in September 2001, of a bankruptcy  order; (d) The change in the balance of Banco Crefisul – Extrajudicial Liquidation was a result of a recovery of R$87,000 in April 2002; (e) Credits with FCVS and with States are stated at present value as described in Note 2.f; and (f) Changes in provisions of other institutions under extrajudicial liquidation are a result of ordinary changes in asset values over time.     Note 7 – OPERATIONS WITH THE NATIONAL TREASURY   (a) Deposits to the Federal Government Order: Pursuant to Article 164, Paragraph 3, of the Federal Constitution, Federal Government’s available cash must be deposited with the Banco Central and remunerated, according to Article 1 of Provisional Measure 2,179, by the weighted arithmetic average rate of the intrinsic yield of federal domestic public debt securities issued by the National Treasury held by the Banco Central. This yield is calculated on a daily basis and capitalized on the last day of the subsequent ten-day period; (b) Remuneration of Deposits to the Federal Government Order, to be Transferred: The balances for such items refer to that part of the remuneration, either positive or otherwise, accounted for at the end of the month and transferred to the account “Deposits to the Federal Government Order” on the last day of the subsequent ten-day period; (c) Credit to be Covered by the National Treasury: Under the Fiscal Responsibility Law and Provisional Measure 2,179, any positive result achieved by the Banco Central, after constitution or reversal of reserves, becomes an obligation of the Banco Central before the Government, and must be transferred by the tenth business day after financial statements have been approved by the National Monetary Council – CMN. Conversely, a negative result becomes a credit of the Banco Central before the Government and must be paid by the tenth business day of the year subsequent to the one in which the statements are approved. In both cases, the amounts shall be indexed using the same indices applied to the account “Deposits to the Federal Government Order”; (d) Settlement of Contributions – Law 9,650: With the judicial decision for Direct Unconstitutionality Action – ADIN 449, of 11.22.1996, employees of the Banco Central were grouped under the Sole Juridical Regime – RJU, with the decision being retroactive to 12.11.1990. Thus, between 12.11.1990 and the date of the ADIN judgment, all payments and collections made by the Banco Central to the National Institute of Social Security – INSS and the Federal Revenue and Customs Secretariat – SRF had to be revised. Law 9,650 was enacted on 05.27.1998, with the changes introduced under Provisional Measure 45/2002, of June 25, 2002, which aimed to regulate this situation and determined, among other things, that a settlement of accounts should be made between the Banco Central, the National Treasury, SRF and Banco Central employees regarding contributions to the Civil Servant Social Security Plan, INSS and FGTS. The settlement includes refunds provided in rescissory action 8/94 –TRT / 10th region, and resulted in balances receivable and payable between the parties, as recorded in “Settlement of Contributions – Law 9,650”. The balance resulting from the above settlements may be acquired by the Government under Article 9(I)(c) of Provisional Measure 2,179;   (e) Financial Relationship with the National Treasury:  
 
06.30.2002
  06.30.2001
Debt Balances
231.184.121
169.044.815
National Treasury Notes – NTN (Note 4)
102.288.643
26.162.052
National Treasury Financing Bill – LFT (Note 4)
57.322.407
101.185.571
National Treasury Bill – LTN (Note 4)
57.034.563
34.389.327
Securitized Credits – CVS (Note 4)
1.604.348
1.478.771
Wage Variation Compensation Fund – FCVS
1.507.833
1.390.292
Credit to be Covered by the National Treasury (Note 7.c)
10.904.617
4.079.561
Judicial Deposits in the name of the National Treasury
3.701
3.701
Remuneration of Federal Government Deposits, to be Transferred (Note 7.b)
    -
315.152
Settlement of Contributions – Law no. 9,650 (Note 7.d)
489.318
    -
PND – State banks
4.310
16.722
Credits Subject to Refunds
24.338
23.666
Taxes and Contributions to be recoverable
43
    -
 
Credit Balances
104.831.358
84.506.081
Deposits to the Federal Government Order (Note 7.a)
103.164.918
84.467.330
Settlement of Contributions – Law no. 9,650 (Note 7.d)
230.463
    -
Remuneration of Federal Government Deposits, to be Transferred (Note 7.b)
1.389.319
    -
Agricultural Activity Guarantee Plan - Proagro
    -
279
Deposit in Foreign Currencies - Paris Club
8.423
3.894
Funds tied to Administration of Foreign Debt Guarantees
14.222
11.525
Deposits Resulting from Court Decisions
9.263
9.026
Monetary Reserve Available
1
    -
Taxes and Contributions to be Collected
14.749
14.027
  Observation: The above values do not consider adjustments to market and/or present values and provisions.   (f) Financial Flow with the National Treasury:  
Description
1st half of 2002
1st half of 2001
Federal Public Securities
5.474.927
5.569.847
Acquisition
(23.590.817)
(22.305.068)
Redemption
24.832.689
26.319.993
Interests
4.233.055
1.554.922
 
Other Values Collected
(14.748.773)
(8.925.584)
Remuneration of Available Cash
(14.748.773)
(7.785.299)
Transference of the results at December 2000
    -
(1.137.615)
Transference of Foreign Debt – Resolution 1,564/89
    -
(2.670)
 
Net Financial Flow
(9.273.846)
(3.355.737)
  Observation:     Includes only transactions of the account "Deposits to the Federal Government Order" resulting from Banco Central asset and liability operations     Note 8 – OPERATIONS WITH CENTRUS   As a result of ADIN 449 (Note 7.d), Law 9,650 determined, additionally that: (a) Centrus shall manage funds from the employer contributions to private pension funds, made by the Banco Central to December 1990, for employees covered by the RJU. Such funds are indexed based on the average yield of Centrus Foundation assets and are recorded to the Banco Central assets in the account "Funds Managed by Centrus"; (b) the Banco Central shall pay-in mathematic reserves to enable Centrus to entirely assume the retirement benefits in effect until December 1990, under the Social Security General System – RGPS. The corresponding funds, recorded as a Banco Central liability, to the account "Amounts Payable – Centrus", are being corrected by the IGP-M plus 6% p.a. and paid-in in consecutive yearly installments, of a minimum  of one tenth of the updated original balance, as authorized by the Annual Budget Law. At the time of these statements and under the budgetary law, the Banco Central did not record this expense within its result. Instead, the value was recorded to the account “Anticipated Expenses or Expenses to be Appropriated”. However, in order to present its accounting records on an accrual basis, the Banco Central recorded the balance in the appropriate income account at June 28, 2002. The negative impact of this reclassification was R$619,647 in the Banco Central’s half-year result.     Note 9 – SECURITIES RECEIVABLE   This account includes mainly guarantees received from operations with financial institutions, remunerated according to the TR, with monthly amortizations and maturing by the end of 2004, assessed at present value as described in Note 2.f.     Note 10 – CREDITS WITH PROAGRO   Refer mainly to the management fee due by the Agricultural Activity Guarantee Program – Proagro to the Banco Central that, given the exhaustion of the Program’s funds and to avoid the Banco Central be granted priority among other creditors, collection was suspended by the Banco Central Board of Directors until all pending amounts with other beneficiaries have been settled. The fee corresponds to 0.18% of the total Banco Central monthly administrative expenses and  reimburses the Banco Central for expenses incurred in managing the Program. Given the uncertainties involving the receipt of this fee, a provision was made in June for doubtful receivables, corresponding to 100% of the existing balance.     Note 11 – DEPOSITS BY FINANCIAL INSTITUTIONS   Deposits by financial institutions with the Banco Central comprise mainly mandatory reserve deposits, a monetary policy instrument used to limit the institutions’ ability to lend. These deposits may be demanded in cash or in federal public securities. In the case of federal public securities, these are recorded in a rectifying account, since they remain in the Special System of Clearance and Custody – Selic in the name of the depositing institution, but linked to its compliance with the deposit requirements. The Main deposits currently required are as follows: (a) demand deposits – the reserve deposits shall be made in cash and are not remunerated; (b) savings deposits – the reserve deposits shall be made in cash and are remunerated based on TR + 6.17% p.a., for free, private funds and rural savings, and based on TR + 3.00% p.a. for earmarked savings accounts; (c) term deposits – the reserve deposits shall be made in public securities recorded with Selic; (d) judicial deposits – the reserve deposits shall be made in public securities recorded with Selic.     Note 12 – DEPOSITS EARMARKED TO GUARANTEE OPERATION   The account refers to funds of financial institutions under extrajudicial liquidation, resulting from guarantees received for  operations performed before liquidation had been decreed. The funds remain deposited with the Banco Central and are invested in public securities to protect the value of the guarantee, which results in them being recorded in a rectifying account.     Note 13 – MONEY SUPPLY   Money Supply represents the balance of paper money and coins held by the public and financial institutions, recorded at the value of issue. The breakdown of bank bills and coins by denomination, in circulation at June 30 was as follows:  
 
2002
2001
Quantity (Units)
R$1.000
Quantity (Units)
R$1.000
Bank Notes
2.244.666.046
32.940.667
1.755.206.857
26.851.768
R$1.00
851.397.950
851.398
652.384.809
652.385
R$2.00
76.373.947
152.748
    -
    -
R$5.00
196.705.966
983.530
181.109.032
905.545
R$10.00
641.722.043
6.417.221
534.677.671
5.346.777
R$20.00
839.768
16.795
    -
    -
R$50.00
464.873.238
23.243.662
375.129.471
18.756.474
R$100.00
12.753.134
1.275.313
11.905.874
1.190.587
 
Coins
7.552.259.286
958.505
6.827.309.677
897.350
R$0.01
2.664.814.607
26.648
2.416.892.247
24.169
R$0.05
1.696.549.657
84.827
1.501.065.570
75.053
R$0.10
1.755.338.776
175.534
1.599.168.537
159.917
R$0.25
660.118.977
165.030
542.361.050
135.590
R$0.50
537.942.360
268.971
530.403.859
265.202
R$1.00
237.494.909
237.495
237.418.414
237.419
 
Commemorative Coins
457
 
431
 
TOTAL
 
33.899.629
 
27.749.549
  In recent years, the trend for real growth in money supply has been significantly lower than in the period from 1994 to 1999. This trend suggests that the influence of factors that encouraged the significant increase following implementation of the Real Plan, such as low opportunity cost — which increases hoarding by the public  —, demand forthe increase in automatic teller machines and the growth recorded inof the informal economy, has been almost entirely absorbed.     Note 14 – NET WORTH   Net Worth comprises: (a) Assets recorded upon the establishment of the Banco Central and results reported by the Banco Central  until the 1987 fiscal year, monetarily restated to December 1995; (b) Contingency Reserve constituted under Article 2, Paragraph 3, of Provisional Measure 2,179, for the purpose of reducing redemption of securities in the Banco Central’s portfolio and, consequently offer adequate conditions to administer the monetary policy; (c) Revaluation Reserve, the change during the period was due to a realization adjustment in 2002.     Note 15 – RESULT OF THE FIRST HALF OF 2002   The negative result of R$10,901,085 reported in the first half of 2002 was to a large extent due to adjustment to market value of the federal securities portfolio, resulting in a net expense of R$10,442,972. These adjustments reflect a significant increase in discount rates of securities indexed to foreign currency, influenced by the recent economic conditions that reflect, among other aspects, an appreciation of the US dollar against the Brazilian Real, current interest rate levels, forecast inflation rates and increased Brazilian country-risk. For the same period in 2001, the Banco Central result was negativepositive in R$4,084,749 basically due to effects of exchange rate variations on the asset structure prevailing at that time.     Note 16 – FISCAL RESPONSIBILITY LAW – INFORMATION REQUIRED   (a) impact and fiscal cost of  operations – Complementary Law 101, Article 7, paragraph 2: The Single Paragraph of Article 8 of Law 4,595/64, amended by Decree-Law 2,376/87, provides that “results achieved by the Banco Central do Brasil, considering revenues and expenses from all of its operations, shall be, effective as from January 1, 1988, assessed on an accrual basis and transferred to the National Treasury, after compensation for any losses from previous fiscal years”. This provision was partially changed by Article 7, and Paragraph 1, of the Fiscal Responsibility Law: “Article 7.     The Banco Central do Brasil results, which are determined after the constitution or reversal of reserves, are classified as National Treasury revenue and must be transferred within ten-business day after the approval of the half-year balance sheets. Paragraph 1. The negative results must be classified as a Treasury liability to the Banco Central do Brasil and must be stated in a specific budget allocation account.” According to Article 2(II) of Provisional Measure 2,179/2001, this negative result shall be paid by the tenth business day of the fiscal year subsequent to the approval of the balance sheet by the National Monetary Council. Therefore, the following previals: I. The result of the Banco Central do Brasil considers revenues and expenses related to all Banco Central operations; II. Positive results are transferred to the National Treasury as revenues  and negative results are covered as expenses by the National Treasury; III. Such results are recorded in the Fiscal Budget to the account of the National Treasury. Consequently, the Banco Central recorded a surplus of R$797,974 for the first quarter and a deficit of R$11,708,059 for the second quarter. The result calculated in the half-year subsequent to the reversal of reserves shall be covered by the National Treasury. According to Article 9, Paragraph 5 of Supplementary Law 101, within ninety days from the closing of the half-year, the Banco Central shall submit, at a joint meeting of the National Congress thematic commissions, an assessment of compliance with objectives and targets for monetary, credit and foreign exchange policies, evidencing the impact and fiscal cost of its operations and results presented in the balance sheets;   (b) cost of remunerating available cash of the National Treasury – Complementary Law 101, Article 7, Paragraph 3:   Expenses from remuneration of National Treasury deposits amounted to, in the first quarter of 2002, the sum of R$2,984,346, and R$13,028,525 in the second quarter of 2002 (R$16,012,871 during the half-year);   (c) cost of maintaining foreign exchange reserves – Complementary Law 101, Article 7, paragraph 3: The cost of maintaining foreign exchange reserves is calculated as the difference between the rate of yield of reserves and the average rate from obtaining such reserves, as calculated in the Banco Central liabilities. During the first quarter, with a daily average of R$88,479,272, and considering the effects of foreign exchange indexing and the adjustment of assets to market prices, operations with international reserves reported a maintenance cost of approximately 2.2%, resulting from the positive yield of reserves of 0.3% in the period, which, after deducting the average cost of liabilities of the Banco Central of 2.5%, amounted to a lien of R$1,955,303. In the second quarter, with a daily average of R$89,887,199, and considering the effects of foreign exchange indexing and adjustment of assets to market prices, operations with international reserves reported a yield of approximately 6.5%, resulting from the positive remuneration of reserves in the period — 23.2% — which, after deducting the average cost of liabilities of the Banco Central — 16.7% — generated a positive result of R$5,864,511. Thus, during the first two quarters, the net yield of reserves was 4.3%, which represents remuneration of R$3,909,208;   (d) yield of Banco Central securities portfolio, with emphasis on Government issued securities – Complementary Law 101, Article 7, Paragraph 3:  
Description
Revenues
Expenses
Result
First Quarter
16.413.107
(12.735.380)
3.677.727
Government Securities
11.504.961
(4.052.791)
7.452.170
Banco Central Securities
4.908.146
(8.682.589)
(3.774.443)
 
Second Quarter
30.520.777
(40.928.798)
(10.408.021)
Government Securities
30.031.314
(15.396.144)
14.635.170
Banco Central Securities
489.463
(25.532.654)
(25.043.191)
 
HALF-YEARLY TOTAL
46.933.884
(53.664.178)
(6.730.294)
  For the second quarter, a large part of the net result may be explained by the following factors: I – Government Securities – the positive net result of R$14,635,170 resulted from interest income, foreign exchange indexing and discounts of predetermined securities and expenses from adjustment to market value; II –  Banco Central Securities – the positive net result from own securities was negative - R$25,043,191 - and basically resulted from net expenses from foreign exchange indexing and NBC's interest expenses.     Note 17 – OTHER INFORMATION   (a) precatory letters and legal demands: According to Article 100, Paragraph 1 of the Federal Constitution, public law entities shall include in their respective budgets amounts necessary to cover precatory letters presented by July 1st of each year, for payment by the end of the subsequent fiscal year. After Constitutional Amendment 30, of September 13, 2000, came into effect, payment of precatory letters resulting from actions submitted to courts up to December 31, 1999, shall be settled in existing currency, at their actual value plus legal interest rate, paid in  equal, successive yearly installments within a maximum period of ten years, with preference for small values and alimony related credits. The following table presented the values paid as a consequence of legal precatory letters:  
YEAR
AMOUNT
1998
13.557
1999
6.354
2000
15.621
2001
5.961
2002 (*)
49.213
  (*) Amounts to be paid by December 2002 according to the budget law.   As of June 30, 2002, the Banco Central was  party to 56,489 legal claims, as presented below, accordingly to the nature of the claim and cause:  
Nature of Claim
Quantity
Nature of Cause
Quantity
Ordinary Action
38.802
Collor Plan
43.425
Provisional Remedy
3.523
SFH
597
Interlocutory Appeal
4.323
FGTS
970
Writ of Mandamus
1.787
Extrajudicial Liquidation
757
Declaratory Action
2.269
Bankruptcy
729
Tax Foreclosure Action
1.282
Rural Credit – Proagro
626
Labor Claim
956
CADIN – CADIP – SERASA
367
Stay of Execution
1.553
Foreign Exchange
486
Summary Action
225
Financial Encumbrance
398
Public Civil Action
234
Civil Servant
96
Court Payment Action
130
Recorded Credit
1.384
Rescissory Action
105
Invitation to Bid
95
Suspension of Mandamus
62
Services provided
54
Rejection of Demand Value
120
Buyers' Association
427
Judge’s Award
35
Public Debt Security
209
Action of Detinue
56
Other
5.869
Popular Action
77
Total
56.489
Habeas Data
47
 
Bankruptcy Action
501
Plea for Change of Venue
200
Other
202
  Total
56.489
  Given the possible impact depending on the outcome of the above actions, the Banco Central is assessing the judicial contingencies to make the provisions for losses based on the Banco Central’s expectations.   (b) financial and actuarial condition: Law 8,112/90, in Article 185, Paragraph 1, provides that retirement and pension payments shall be granted and maintained by bodies or entities to which the employee is linked. However, the Fiscal Responsibility Law provides that the Budget Guidelines Law shall include a schedule containing an assessment of the financial and actuarial condition of the civil servant employment regime (Article 4, Paragraph 2(IV)(a)). Therefore, the specific values related to Banco Central employees are not being accounted for, since this information should be compatible with that of other public bodies and since the Budget Guidelines Law – LDO already includes such values;   (c) Funds managed by the Banco Central: Pursuant to legal and regulatory provisions, the Banco Central manages the following funds: I. Reserve for Fostering Currency Stability and Use of Checks – Recheque: for the purpose of disseminating and promoting stability of the domestic currency, promoting the use of checks as a payment instrument and improving bank operations and covering the costs of preparing and disseminating the Register of Issuers of Checks not supported by Funds – CCF; II. Deposit and Real Estate Bond Guarantee Fund – FGDLI: for the purpose of protecting savings deposits (except rural savings) and real estate bonds against risks of insolvency of institutions accepting such deposits; III. Agricultural Activity Guarantee Program – Decree 175/91 (Proagro): for the purpose of exempting the rural producer from financial obligations related to crop credit operations, settlement of which is bound to be affected by natural phenomena, pests and diseases affecting crops and cattle and to indemnify the producer who has to use his or her own funds to cover costs related to the natural phenomena mentioned above; IV. Monetary Reserve: for the purpose of securing fair and normal operation of financial and capital markets. The National Monetary Council Resolution 2,211/95 regulates the Credit Guarantee Fund – FGC, a private non-profit organization established to manage mechanisms aimed at protecting holders of credits against financial institutions. According to National Monetary Council Resolution 2,197/95, which authorized the establishment of this Fund, the Recheque and FGDLI assets should be assigned to FGC. However, under a Preliminary Injunction granted by the Supreme Court of Brazil – STF in the Direct Unconstitutionality Action 1,398/96, this transfer has been suspended, pending final judgment on the case. The accounting procedures applicable to Funds managed by the Banco Central are the same as those applicable to the institution itself. Thus, half-yearly balance sheets are prepared, submitted to independent auditors and released on the Internet (www.bcb.gov.br). These Funds, although managed by the Banco Central, do not receive Banco Central funds, and the costs are met through payment of a management fee as authorized by the National Monetary Council.   (d) Publication The Banco Central do Brasil financial statements are published in the Federal Official Gazette and are available on the Internet at the address www.bcb.gov.br.   Governor of the Banco Central do Brasil ARMINIO FRAGA NETO   Directors BENY PARNES, CARLOS EDUARDO DE FREITAS, EDISON BERNARDES DOS SANTOS, ILAN GOLDFAJN, LUIZ FERNANDO FIGUEIREDO, SÉRGIO DARCY DA SILVA ALVES, TEREZA CRISTINA GROSSI TOGNI.   Head of the Financial Administration Department: JEFFERSON MOREIRA Accountant, CFC-DF 7333