Brazil is struggling with severe economic problems and dealing with the millennium bug has not been a priority.

The public is said to be ill-informed on what the millennium bug is all about. It looks likely that people will hoard cash over the millennium period for fear that banks will not run properly.

To combat this, according to a report in the Brazilian newspaper Folha de Sao Paulo, the Central Bank is planning to print extra money in the run-up to the new year.

The bank will increase the amount of money available in December by between six billion and seven billion reals. It has already stopped destroying old banknotes and ordered the printing of new ones.

'Isolated disruption'

The Brazilian press reports that foreign investors might be so worried about the country's progress they may withdraw their money from Brazilian markets and place it in more reliable places such as US banks.

Despite all this, computer consultant Gartner Group has put Brazil's readiness on a par with Japan and European countries including France and Finland. Gartner has assessed that Brazil is likely to experience isolated disruptions in utilities and transport and possible severe loss in government services.

Extra cash is nothing new

And the Central Bank believes the banking system is safe from possible millennium breakdowns and sees the printing of new money as a precaution against events out of its control.

According to the Central Bank's millennium co-ordinator, Antonio Gustavo Matos do Vale, the bank always increases the amount available to banks by 20% in December. It is because of the growth in industrial production and retail sales leading up to Christmas.

But this year the bank will add an extra 25-30% to that already increased figure for December.

The Central Bank is also working is working with the banks and the Brazilian Federation of Bank Associations (Febraban) on a campaign to reassure the public that millennium bug work has been completed.

Leap year worries

The system has also been checked for possible problems when the date changes from 28 to 29 February 2000.

The year 2000 is a leap year, but in the 1960s some computer programmers miscalculated and failed to take it into account. The date change could cause further millennium fears for companies worldwide.

According to the Central Bank all non-banking financial institutions such as cooperatives and buyers' associations will be fully millennium bug compliant by the end of September.

Brazil is working with its neighbouring countries in a South American Y2K forum to combat the bug and is due to hold a progress meeting in November. So far the forum has been reluctant to reveal information to the media and has used its survey studies for internal use only.

-- Old Git (anon@spamproblems.com), August 25, 1999