Brasília, 10/30/2003 (Agência Brasil - ABr) - Vice president José Alencar has once again come out in favor of lower interest rates. Saying that 3% real interest annually would be good for the country (the country's key interest rate, the Selic, is now at 19% - the "real" interest rate is the difference between it and inflation), Alencar declared that "a drop in interest rates would result in more consistent investments," and should be the objective of a national mobilization. Brazilians need to know that we pay real interest rates that are among the highest in the world. [The Selic] is ten times higher than rates in over 20 countries. The real interest rate should not be over 3%, he said.

The vice president pointed out that the key interest rate in the United States, Japan and China is 1%, which means that real intestest could be negative.

Alencar, speaking before a Chamber of Deputies committee, said that he had promised his wife he would not talk about interest rates, but that he could not resist the subject because as a businessman he understood the problem. "The simple fact is that when productive activities are unable to provide a return on invested capital, there will not be investments in production," he explained. (AB)