BRAZIL CURBS PAY TO PERSUADE I.M.F. TO RESUME LOANS
In a move aimed at getting the money it needs to meet a debt payment due Friday, the Brazilian Government has agreed to curb the so-called indexation of its economy, a once-hailed innovation that protected workers' salaries against large increases in the cost of living. The Government's action, taken Wednesday night, took the form of a new regulation restricting salary increases in the next two years to a level 20 percent below the official cost of living figure. Under indexation, salaries had been automatically increased every six months to keep up with inflation. Indexation, a concept first popularized by the Brazilians in the 1970's and since adopted by other countries, ties not only wages but also taxes, rents and a range of other consumer costs to movements in the cost of living.