Brasília, April 30, 2004 (Agência Brasil) - The president of the Brazilian Central Bank (BC), Henrique Meirelles, told a public hearing, yesterday (29), in a joint commission of the National Congress, that Brazil is in solid shape to deal with external crises and surprises, such as an eventual increase in American interest rates or a "brake" on the overheating of the Chinese economy.

According to Meirelles, the BC takes external factors into account, but he assured that "they don't have a predominant weight in making monetary decisions, which are the result of evaluating many variables, beginning with the control of inflation and the convergence between trends and the targets set by the National Monetary Council (CMN)."

Higher interest rates in the United States do not have a cause and effect relationship on Brazil, and markets are already positioning themselves to absorb eventual shifts without bigger jolts, said the president of the BC.

Meirelles said that the foundations of the Brazilian economy are far better now than in the recent past, allowing Brazil "to view the world with great serenity." According to him, the chief indicators of the domestic market show that the federal government's economic policy is producing positive results.

The president of the BC affirmed that the resumption of industrial investments beginning last September provides an example of the recovery of Brazilian entrepreneurs' confidence in the correctness of the fiscal policy that was adopted. He also mentioned the force of the trade balance, which accumulated a record US$ 27 billion surplus over the twelve-month period ending in March.

Translator: David Silberstein