1. Turn the balance of payments into a complete balance sheet.

2. What are the most significant changes in the Brazilian Balance of Payments between 1994 and 1998? Which factors might have contributed to these changes? As foreign investor how would you evaluate these changes?

UV0986 Exhibit 1 BALANCE OF PAYMENTS: INTERPRETATION AND EXERCISE Brazil's Balance of Payments 1994 and 1998 1994 1998 International Transactions (US$ MM) Balance of Payments for Brazil Current Accounts, nie (78ald) 44,102 51,136 Goods: imports fo.b 78aad) -33,241 57,739 Trade Balance (8acd) Services: exports (78add) 4,908 7,631 Services: imports (78aed) 10,254 16,676 Balance on Goods & Services (78afd) Income received by Brazilian residents from abroad 78agd) 2,202 4,914 Income paid to foreign residents (78ahd) 11,293 24,531 Balance on Goods, Services & Inc (78aid) 2,577 1.795 154 359 Capital Account, n.I.e (78bcd) (1) Capital Account, inflows (78bad) 175 488 Capital Account, outflows (78bbd) 113 Financial Account, nie (78bjd) Direct investment outflows (78bdd) (2) 1,037 2,721 Direct Investment inflows into Brazil 78bed) 3,072 31,913 Basic Balance Portfolio investments abroad by Brazilian residents (78bfd) (3) -3,052 594 Portfolio Investments in Brazil by foreign residents, nie (78bgd) 47,784 19.013 Other investments abroad by Brazilian residents (78bhd) (4) -4,368 5,992 Other investments in Brazil by foreign residents, nie (78bid) 34,379 21,556 Net errors and omissions (5) -4.42 2,911 Capital Account Narrowly Defined Overall Balance (78cbd) Reserves and Related Items (79dad) -6,598 16,302 7,215 6,990 Use of Fund Credit and Loans (79dcd) 133 4,773 750 4,539