832.5151/1434: Telegram
The Ambassador in Brazil (Caffery) to the Secretary of State
[Received August 28—3:05 p.m.]
269. Owing to the European situation the Bank of Brazil is restricting the purchase of exchange to dollar export bills. The bank is selling dollar exchange at 19 milreis 950 for dollar collections received by it and for daily quotas. Firms applying for other exchange for the liquidation of import bills are requested to deposit milreis at the rates in effect on August 24 or purchase from other banks at prevailing rates.
Other banks are restricting purchases to actual requirements. They are paying 19 milreis 950 to 20 milreis for export bills and selling dollar exchange for their own collections at approximately 20 milreis 150.
The Director of Exchange informs me that the bank’s position in pound is just about equal to the current unpaid obligations in pound. Also that the bank’s position in German compensation marks is approximately 7,400,000 compensation marks and that in the event of war the bank could liquidate this position without loss.