An Overview of Asset Prices and Liquidity Indicators Latin Macro Analysis BRAZIL Swiss Global Economics An Overview of Asset Prices and Liquidity Indicators

Country Risk EMBI Plus, Sovereign Spread, b.p. 2600 2200 1800 1400 Announcement of IMF Package 2600 Rise in spread since April 12 th : 936 b.p. Lula rises in the polls 2200 Beginning of Argentine Crisis Argentina’s Default and Pesoification 1800 1400 1000 600 1-Jun-00 1-Oct-00 1-Dic-00 1-Dic-01 1-Ago-00 1-Feb-01 1-Abr-01 1-Jun-01 1-Ago-01 1-Oct-01 1-Feb-02 1-Abr-02 1-Jun-02 1-Ago-02 1-Oct-02

EMBI Bond Prices 12/04/02 = 100 Announcement of IMF Package 110 Beginning of Argentine Crisis Argentina’s Default and Pesoification Lula rises in the polls 100 90 80 70 Price decline since April 12 th: -20.5% 60 50 1-Jun-00 6-Feb-01 6-Jul-01 21-Jul-00 9-Sep-00 18-Dic-00 3-Dic-01 29-Oct-00 28-Mar-01 14-Oct-01 22-Ene-02 13-Mar-02 2-May-02 17-May-01 25-Ago-01 21-Jun-02 10-Ago-02 29-Sep-02 18-Nov-02

Nominal Exchange Rate (Reales per Dollar) 3.7 3.2 2.7 2.2 1.7 Announcement of IMF Package Beginning of Argentine Crisis Argentina’s Default and Pesoification 3.7 Lula rises in the polls 3. 59 3.2 2.7 2.2 56.1% 1.7 03-Ene-00 03-Mar-00 03-Jul-00 03-Ene-01 03-Mar-01 03-Jul-01 03-May-00 03-Sep-00 03-Nov-00 03-May-01 03-Sep-01 03-Nov-01 03-Ene-02 03-Mar-02 03-Jul-02 03-May-02 03-Sep-02 03-Nov-02

Yield Curve of the Real NDF Reales per Dollar 4.65 4.25 3.85 3.45 3.05 1-Mar-02 4.65 4.55 29-May-02 31-Jul-02 4.25 14-Oct-02 18-Nov-02 4.03 3.84 3.86 3.85 3.94 3.59 3.45 3.55 3.43 3.05 3.20 2.96 2.73 2.65 2.55 2.52 2.36 2.38 2.25 Spot 1 month 1 year

Interest Rates (Selic benchmark CB rate and CDI-Over interbank rate) 22% 21% 20% Selic Rate 19% 18% CDI-Over Rate 17% 16% 15% 14% 14/2/01 22/3/01 30/4/01 31/5/01 27/6/01 24/7/01 21/8/01 18/9/01 24/1/02 22/2/02 1/4/02 6/5/02 3/6/02 1/7/02 26/7/02 22/8/02 18/9/02 15/10/01 27/11/01 27/12/01 15/10/02

Announcement of IMF Package Interest Rates (Selic benchmark CB rate, 180 and 360-day Interest Rate Swaps, in %) Announcement of IMF Package 32 30 360-days 28 26 180-days 24 22 Selic 20 18 16 02-Jul-01 02-Ago-01 02-Sep-01 02-Oct-01 02-Nov-01 02-Dic-01 02-Ene-02 02-Feb-02 02-Mar-02 02-Jun-02 02-Jul-02 02-Abr-02 02-May-02 02-Ago-02 02-Sep-02 02-Oct-02 02-Nov-02

Country Risk and Interest rate (C-Bond Spread in b.p. and 360-day Interest Rate Swap in %) 2400 35 interest rate 30 1900 25 C-Bond Spread 1400 Interest Rate 20 900 15 C-Bond spread 400 10 02-Ene-01 02-Jul-01 02-Jul-02 02-Mar-01 02-May-01 02-Sep-01 02-Nov-01 02-Ene-02 02-Mar-02 02-May-02 02-Sep-02 02-Nov-02

Stock Prices Bovespa Index 2-Ene-01 5-Feb-01 9-Mar-01 12-Abr-01 Announcement of IMF Package 7500 9500 11500 13500 15500 17500 19500 2-Ene-01 5-Feb-01 9-Mar-01 12-Abr-01 18-May-01 21-Jun-01 25-Jul-01 28-Ago-01 1-Oct-01 2-Nov-01 6-Dic-01 Lula rises in the polls 9900 Beginning of Argentine Crisis Argentina’s Default and Pesoification 8900 7900 6900 In Reales 5900 In Reales In Dollars 4900 3900 In Dollars 2900 1900 2-Jul-02 11-Ene-02 20-Mar-02 24-Abr-02 29-May-02 6-Ago-02 9-Sep-02 14-Feb-02 11-Oct-02 14-Nov-02

International Reserves of the C.B (US$ millions; daily) IMF disbursement US$ 3.0 billion 43000 IMF disbursement US$ 4.5 billion IMF disbursement US$ 10.0 billion 41000 39000 37000 35000 33000 repayment to IMF US$ 4.2 billion 31000 02-Ene-01 02-Mar-01 02-Jul-01 02-Jul-02 02-May-01 02-Sep-01 02-Nov-01 02-Ene-02 02-Mar-02 02-May-02 02-Sep-02 02-Nov-02

International Reserves of the CB (US$ millions; monthly) IMF disbursement of US$ 3.0 billion 45000 IMF disbursement of US$ 10.0 billion International Reserves IR excluing IMF credit 40000 35000 30000 25000 20000 Dic-00 Feb-01 Abr-01 Jun-01 Dic-01 Ago-01 Oct-01 Feb-02 Abr-02 Jun-02 Ago-02

International Reserves / Monetary Base Monthly IMF disbursement of US$ 10.0 billion IMF disbursement of US$ 3.0 billion 2.5 International Reserves IR excluing IMF credit 2.0 1.5 1.0 0.5 0.0 Dic-00 Feb-01 Abr-01 Jun-01 Ago-01 Oct-01 Dic-01 Feb-02 Abr-02 Jun-02 Ago-02

Auctions of Treasury Instruments 3-month Real denominated fixed rate T-Bills (LTN’s) 2000 22.0% Amount auctioned = bids Amount auctioned > bids 21.5% 21.0% 1600 rate 20.5% 20.0% 1200 19.5% Millions of Reales rate 19.0% 800 amount 18.5% 18.0% 400 17.5% No bids 17.0% 16.5% 11-Jun-02 02-Jul-02 10-Jul-02 16-Jul-02 23-Jul-02 30-Jul-02 06-Ago-02 13-Ago-02 20-Ago-02 27-Ago-02 03-Sep-02 10-Sep-02 17-Sep-02 24-Sep-02 01-Oct-02 08-Oct-02 05-Nov-02

Auctions of Treasury Instruments 3-Month Selic Indexed T-Bills (LFT’s) 6000 2.0% Amount auctioned > bids 2.0% rate 5000 1.9% 1.9% 4000 1.8% Millions of Reales 3000 1.8% Rate amount 1.7% 2000 1.7% No bids 1.6% 1000 1.6% 1.5% 3-Sep-02 15-Oct-02 22-Oct-02 29-Oct-02 5-Nov-02 12-Nov-02 19-Nov-02

The Run from Investment Funds to Saving Deposits In millions of R$ Net Flows to Investment Funds Saving Deposits (Caderneta de Poupança) 10000 139000 Since 31st May: -R$ 62.2 billion Since 31st May: R$ 19.0 billion 5000 136000 31st May: Marking to market of IF’s bonds 133000 -5000 130000 127000 -10000 124000 -15000 121000 -20000 31st May: Marking to market of IF’s bonds 118000 -25000 Ene-02 Feb-02 Mar-02 Abr-02 May-02 Jun-02 Jul-02 Ago-02 Sep-02 2-Ene-02 2-Mar-02 2-Jul-02 2-May-02 2-Sep-02 2-Nov-02 Until 13 Nov

Deposits Demand + Saving + Time, in millions of R$ 31st May: Marking to market of IF’s bonds 330000 310000 290000 270000 250000 Since 31st May: R$ 46.2 billion 230000 2-Ene-01 2-Mar-01 2-Jul-01 2-Ene-02 2-Mar-02 2-Jul-02 2-May-01 2-Sep-01 2-Nov-01 2-May-02 2-Sep-02 2-Nov-02