Rio - In a speech at the American Chamber of Commerce in Rio de Janeiro, the president of the Central Bank, Henrique Meirelles, declared that the external situation at the moment is favorable for Brazil. Meirelles said the reduction of the country's average net foreign debt from 35.9% of GDP to 14.8% was a strong point.

He pointed out that the country's reserves were once again close to 50% of total debt, rising US$38 billion in a little over two years. "Reserves reached US$53.8 billion at the end of 2005 and continue to rise," he said.

As for foreign debt, it has fallen US$80.3 billion over the last five years as the country eliminated its current account deficit, and entered a period of growth accompanied by current account surpluses which is a very good sign, he said.

Meirelles concluded by saying that the result of sound economic policy was higher resistance to shock waves from abroad and the creation of an economy that was much less vulnerable.

Translation: Allen Bennett