São Paulo, November 18, 2002 (Agência Brasil - ABr) - The president of the Central Bank, Armínio Fraga, said today the representatives of the new administration have provided "strong and unequivocal signs that there will be no tolerance for inflation." Fraga commented that he has observed a positive change in inflationary expectations and that some of the economic policies currently in effect should be maintained and improved in the next administration, which should resolve the market's uncertainty.

Fraga also said that there is an unfounded fear of a change in rules. "When you evaluate that a probability of a change in rules exists, an extremely complicated dynamic is created," he affirmed.

According to Fraga, "the challenge that faces the new government-elect is to make it clear there will be no rules change." He emphasized that it is necessary to preserve the country's fiscal, monetary, and financial advances, and he defended the Central Bank's operational autonomy as a big step in this direction. (DAS)