Rio, 6/19/2003(Agencia Brasil-ABR) – The reduction of half a percentage point in the basic interest rate (Selic) is a market shut-up from government economists, says Carlos Reis, the president of the National Stock Market Commission (Comissão Nacional de Bolsas) (CNB). According to Reis, "The market clamor got so loud that something had to be done. This was more a political decision than a technical decision."

Reis said the measure will not cause any changes in the economy, but is a signal that further interest rate reductions are on the way. He added that to make the economy grow, the Copom had to reduce mandatory bank reserve limits on sight deposits (now at 60%). Reducing that limit, said Reis, will give the economy and the capital market a boost, making money available for investments in stocks or debentures. (AB)