Brasília, March 25, 2004 (Agência Brasil) - The president of the Central Bank (BC) of Brazil, Henrique Meirelles, addressed the Senate Economic Affairs Commission today on the Brazilian government's economic policy. According to him, the adjustments in fiscal and monetary policy made over the course of President Luiz Inácio Lula da Silva's Administration established solid conditions for the country to cope with hypothetical external shocks.

The Social Security reform approved last year would also have made a substantial contribution to the process of fiscal adjustment, allowing a steady reduction in the government debt/GDP ratio.

According to the president of the BC, exports have become more diversified, in terms of both their destination and the list of products. He pointed out that sales to China grew 317% in 2003. There were also significant increases in exports to Russia (254%) and South Africa (142%).

Meirelles also emphasized the good performance of the Brazilian trade balance, which contributed to a US$ 4.1 billion current account surplus in 2003. He said that he believes in the maintenance of the current accout surplus this year as well.

According to Meirelles, the drop in the country risk premium, which currently stands slightly below 600 points, provides an additional incentive to investments, which will further intensify the "firm resumption of industrial activity in Brazil."

Translator: David Silberstein