Brazil and LatAm Say the Fundamentals of their Economy Are Strong

Brazil's Central Bank chief, Henrique Meirelles The presidents of the central banks of the main economies in Latin America met this Monday, in Santiago, Chile, and disclosed a joint statement showing that their countries are "in better conditions to face the financial turbulences, thanks to their solid economic fundaments."

The meeting included the presidents of the central banks of Brazil, Argentina, Chile, Colombia, Mexico and Peru. Venezuela was also invited, but did not show up.

The president of the Central Bank of Brazil, Henrique Meirelles, and his Argentine colleague, Martí­n Redrado, discarded the possibility of central banks taking joint measures, as happened in the case of European central banks.

"The joint actions promoted some weeks ago by the richest economies in the world had a specific finality, which was liquidity in dollars," explained Meirelles.

"Our conclusion is that, due to the unique characteristics of each economy in our region and to the degree of integration we have with greater economies, the kind of strategy we have been adopting is the most efficient," he pointed out, adding the important of exchange of information between countries.

The president of the Central Bank of Argentina agrees. "Each one has its particularities," said Redrado.

"As is known, in Brazil some companies took a specific stand in the futures market, in the case of Mexico, commercial companies adopted positions of risk, and each country reacted with the instruments it has, but what is clear is that we all have the disposition to guarantee and preserve the economic and financial stability of our countries," stated the Argentinean.

Redrado pointed out the climate of confidence among the presidents of the central banks, but he did not consider any chance of the organisations coordinating their actions. "Coordination is a word that does not qualify this meeting. What we have is a spirit of collaboration and engagement and economic and financial stability," he pointed out.

The meeting of the presidents of central banks was to be secret, but a statement by the Central Bank of Brazil alerted the press, announcing the establishment of an Advisory Council for the Americas, an organization connected to the International Clearance Bank (BIS), which includes Central Bank presidents worldwide.

But the meeting had already been replaced by an informal conversation between the central bank presidents of the countries of Latin America, which started these inquiries last week, in Washington.

Meirelles considers the funds made available to increase liquidity are working adequately and that there is no difficulty in the concession of credit.

"A good part of the compulsory loan is made available so that there may be credit concessions to medium and small banks. In the case of lines of loans with guarantees in foreign currencies we also have a direct link with credit concession in which the banks are obliged to use these funds to grant credit. However, we are monitoring this evolution of markets and are going to take the necessary measures," said Meirelles.




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