Abstract

This paper offers a discussion of the proposal of securitization of external debt
in the context of Brazilian economy. After analyzing many questions involved, the paper
presents a specific proposal of conversion of external debt into bonds with Iong term maturity
and fixed interest rate. This proposal should reduce the external transfer of real resources
and ecrease the outstanding of external debt and diminish the vulnerability of Brazilian
economy to an increase in the interest rate as well. The paper presents also a simulation of
Brazilian Balance of Payments and key macroeconomics variables for the period 1988/92 in
order to evaluate the proposal.

JEL Classification: H63; F34.