Brasília, August 11, 2003 (Agência Brasil - ABr) - The president of the National Industrial Confederation (CNI), Armando Monteiro Neto, released a note in which he affirms that he considers positive the Central Bank's decision to reduce the compulsory reserve requirement on demand deposits from 60% to 45%, beginning today (11), even though it is tardy. In his view, "the measure represents a move in the direction of what the productive sector has been calling for, an easing of monetary policy."

In the note, Monteiro Neto also affirms that it is now reasonable to expect the government to adopt other solutions that will enable it to continue to make the country's monetary policy more flexible. "It is the expectation of the CNI, as well as other economic sectors, that the Central Bank's decision will open the way for a new reduction in the prime interest rate, the Selic, which currently stands at 24.5."

According to the note, the need to reduce the compulsory reserve requirement and the prime interest rate (Selic) was discussed on August 4, at the National Industrial Forum. On that occasion, the entrepreneurs produced a document that presented the sector's view of the economic situation and called for a reversal of the belt-tightening measures that were in effect. The entrepreneurs urged the government to lower the prime interest rate with greater alacrity, to lower the compulsory reserve requirement rate on deposits, and to reduce the Long Term Interest Rate (TJLP). (DAS)