Brazil may ask the International Monetary Fund to give it more time to meet strict economic conditions laid down in exchange for a loan, but it still plans to meet the overall targets for this year, central bank governor Carlos Langoni said yesterday.

Langoni has been in Washington for discussions with IMF and U.S. Treasury officials over Brazil's economic and financial problems. He indicated to reporters that the IMF has not yet determined whether or not Brazil was in compliance with the economic criteria set out for the first quarter of this year. Sources said last week that Brazil has had difficulties in meeting its targets for public spending and borrowing. There has been some dispute between Brazil and the IMF over exactly how to measure the public sector deficit. Langoni said "we are coming to a common consensus on how to measure some key variables."

If the nation is found to be out of compliance with the targets, it would ask the IMF for a waiver of the full conditions for the first quarter, while leaving the annual targets unchanged, Langoni said. A formal waiver would then clear the way for Brazil to draw the next installment of a $4.6 billion, three-year IMF credit and the next part of a $4 billion medium-term loan from commercial banks, sources said.

Brazil is caught in a severe cash squeeze as banks have failed to come up with all the money they promised the nation when the IMF agreement was negotiated. Langoni is visiting major banks in New York today to consider how to push for more money from recalcitrant commercial banks. He told reporters in Washington that the liquidity problem was "not a situation that is out of control," and said the central bank is now talking directly to "every major bank where there is a major shortfall" in the amount of money lent. Banks agreed in February to make up short-term credit lines to Brazilian banks to $7.5 billion, but instead these have fallen to $6 billion.

Smaller regional banks in the United States and some European countries, unwilling to lend more money, are responsible for the shortfall. Major bankers and Brazilian officials are considering asking for a short-term loan of $1.5 billion of "committed" funds, in place of the missing credit lines, sources said. It may take at least a couple of weeks to work out detailed proposals, sources said.

Brazil, which owes close to $90 billion overseas, has fallen into arrears on some of its payments as a result of the cash squeeze. Langoni yesterday said that the arrears had stabilized at $550 million net. A U.S. official put the number at around $800 million. The Brazilian central bank governor also said he expected the nation's cash position to ease in the second quarter, as export earnings rise. He said the nation has not asked for a U.S. government loan.