Brasília, February 19, 2004 (Agência Brasil - ABr) - The National Monetary Council (CMN) approved the Central Bank's (BC) results for 2993, the best since the implantation of the Real Plan. Second semester earnings amounted to R$ 7.13 billion, and the overall result for the year added up to R$ 31.32 billion.

According to information released by the BC, the excellent results achieved last year were a consequence of the "process of macroeconomic stabilization, which led to a reduction in the Brazil risk premium, causing an impact on the the Central Bank's bond portfolio, and appreciation of the currency, which had effects on the results of swap operations and the foreign sector."

Swap contracts, which the BC arranges with other financial institutions, serve as a hedge against financial market oscillations or for contracts that involve pre- or post-fixed interest rates. The government earned R$ 18.579 billion from these operations alone.

Currency appreciation, however, resulted in a loss of R$ 9.714 billion. According to the BC, this was due to the fact that the total of assets linked to variations in foreign currencies, chiefly the US dollar, was greater than the total of liabilities of the same nature, while the value of the real rose 18.23% during this period.

Bond market operations brought in R$ 16.3 billion, and interest earnings came to R$ 7.2 billion, mainly in consequence of positive results with government bonds and the application of foreign reserves. (DAS)