Alana Gandra
Reporter - Agência Brasil

Rio - Brazil expects to stick to the path of keeping inflation systematically within the government's target and lowering average real interest rates, according to the president of the Central Bank, Henrique Meirelles.

Yesterday (5), at the International Conference of American Chambers of Commerce in Latin America, he pointed out that when "inflation [is] on target, investors and the population are inspired not to raise prices above the established target." This is so, he explained, "because the target will be met, which leads to lower interest rates in consequence of the falling risk premium."

In response to US entrepreneurs who praised Brazil's economic situation but claimed that a decline in interest rates accompanied by exchange rate stability would enhance confidence and attract more investments, Meirelles informed that Brazil's overall foreign reserves, which amounted to US$ 15.9 billion in 2003, now total US$ 64 billion, indicating the change for the better that has taken place in the Brazilian economy. By the same token, the country's foreign debt, which amounted to US$ 240 billion, now stands at slightly more than US$ 160 billion, of which US$ 70 billion corresponds to government debt.

Translation: David Silberstein