Brasília, October 23, 2003 (Agência Brasil - ABr) - The 1% reduction in the prime interest rate, Selic, the fifth consecutive reduction this year, frustrated the industrial sector. According to the National Confederation of Industry (CNI), the interest rate cut should have been at least 1.5%, from 20% to 18.5% per year. "Today's decision represents a conservative stance, considering that inflation has already subsided and expressive centers persist in maintaining high rates where productive activity is concerned," the CNI argued in a note issued yesterday (22).

According to the CNI, the favorable behavior of inflation, the drop in the Brazil risk premium, and the stability of the exchange rate would have justified a greater cut in the Selic. According to data from the CNI's Economic Policy Unit, even with the reduction, credit interest rates remain high. Despite the frustration, the industrial sector expects further interest rate reductions in coming meetings of the Central Bank's Monetary Policy Committee (Copom). (DAS)