Finance Minister Dilson Funaro, returning from weekend talks in Washington, has declared that Brazil will abandon efforts to enlist the International Monetary Fund in management of the country's massive foreign debt.
At a press conference yesterday in Brasilia, Funaro said he expects to reach agreement with commercial banks for renewal of short-term credits, without any formal commitment to a long-term rescheduling as sought by the IMF.
American and other commercial banks generally have looked to the IMF to impose austere financial terms for its aid to debtor nations prior to the bankers' commitment of new credits. A government spokesman here acknowledged that lack of the IMF imprimatur might restrict the flow of such new credits, but Funaro indicated Brazil's current needs are modest.
Funaro said contacts with creditor banks during the rest of 1985 would be limited to a request for a six-month rollover of current loans and credits, worth $16 billion, due to expire on Jan. 17.
Although some smaller U.S. banks reportedly threatened to withdraw from the consortium of lenders to Brazil after the collapse here last week of three local banks, Funaro said he expected these credits -- vital for Brazil's exports -- to be renewed without difficulty.
But a senior European banking official said that creditors would now have a tougher negotiating stance for the renewal of these credits, and for the possibility of new money in 1986.
After talks with Treasury Secretary James Baker and IMF Managing Director Jacques de Larosiere, Funaro said Brazil was not interested in a thorough renegotiation of its $103 billion debt.
"Brazil will not propose any agreement with the fund because we do not feel that's necessary at the moment," Funaro told reporters immediately after his talks with Baker. "But we will maintain contact, informing the fund of how we're administering the economy," he said.
A "great change" has occurred in the U.S. administration's attitude toward the IMF, he said. It was no longer demanding that debtors meet IMF targets to qualify for the U.S.-initiated proposal of increased commercial lending to debtor nations that has come to be known as the Baker Plan.
In Washington, a Treasury official pointed out that the Baker Plan calls for cooperation among debtor nations, commercial-bank creditors, and international banks, but carries no requirement of an IMF role. It does expect policies by the debtor nation that encourage domestic and foreign investment, he added.
Funaro said Washington no longer questioned Brazil's need for economic growth. That growth is expected to reach 7 percent this year, compared to a 4 percent shrinking of the economy during 1984, when the country was still in compliance with an IMF austerity program.
Although Brazil has kept up to date with its $10.4 billion interest payments this year and has $8 billion cash reserves, ministers have refused to rule out a request for any extra funding next year.
Yesterday, Funaro said there were "serious doubts" about the value of a multi-year debt rescheduling similar to Mexico's. Brazil has been without an IMF agreement for almost a year, since its seventh successive letter of intent on economic targets, from 1983, was withdrawn.
In previous years, the Central Bank has scrambled through the Christmas period to close its balance of payments, in 1982 making use of a U.S. Treasury emergency loan.
Funaro said that a major package of tax increases and economic adjustments that was to have been announced today by President Jose Sarney has been described by de Larosiere as "serious and courageous."
The package is to be announced Thursday after last-minute changes were demanded by the Congress.
Funaro is to attend next month's meeting of the Cartagena group of Latin debtors in Montevideo, at which the Baker Plan is expected to be subjected to close analysis.
Brazil's tough new approach to debt problems is directly linked to a remarkable turnaround in the domestic economy -- and to the rise of Funaro.
Despite measures such as price controls, indexation and real wage increases that some observers describe as tailor-made to irritate the IMF, Brazil's economic growth is expected to top 7 percent this year and the national development bank forecasts at least 8 percent growth for 1986.
Current targets for annual inflation are slightly higher at around 250 percent, but the government has brought down its deficit to around 0.5 percent of gross domestic product and is beginning to sell off money-losing state enterprises.