São Paulo, 11/20/2003 (Agência Brasil - ABr) - The Manufacturer's Federation of the state of São Paulo (Federação das Indústrias do Estado de São Paulo) (Fiesp) has released a note saying it considers the decision by the Monetary Policy Committee [which is housed in the Central Bank - Brazil's Federal Reserve] to reduce the country's basic interest rate (Selic) by 1.5 percentage points a positive sign proving that "the Central Bank is not a prisoner of conservative financial market logic." The reduction brings Brazil's key interest rate down to 17.5% annually.

The note, signed by the president of the Fiesp, Horacio Lafer Piva, went on to say that the Copom decision "boldly went against reigning expectations when it became clear that inflation rates were doing better than had been anticipated. The decision is seen as being coherent with government inflation target policy...."

The Fiesp note added that it "hoped to see a one-digit interest rate in the near future," and closed by calling on the Central Bank to maintain the downward trajectory of the Selic in order to stimulate consumption, while boosting consumer confidence and the demand for credit. (AB)