Even the IMF Wants Brazil to Lower Interest Rates

Inspectors from the International Monetary Fund (IMF) praised Brazil’s economic performance following a three-day inspection. The IMF applauded Brazil’s low inflation and strong exports, but said the country now should reduce sky-high interest rates.

"The country’s economy is doing very well," said Charles Collyns, head of the delegation. "The Central Bank did very well to show markets that it is determined to cut inflation."

Inflation was 7.6% last year and fell to 6% in the 12-month period ending in September. The Central Bank’s target for 2005 is 5.1%.

Exports are expected to push the country’s annual trade balance way beyond the original target of US$ 30 billion, and Brazil has overtaken Mexico as Latin America’s largest economy in dollar terms.

The next step is to reduce interest rates, now at a scorching 19.5%, Collyns said. "Cutting interest rates in a clear and cautious way is important to consolidate the progress achieved so far," he said.

The IMF also endorses Brazil’s policy of buying dollars to bolster its hard currency reserves. "It’s important for the government to maintain a floating exchange rate, while it uses the opportunity to recompose its reserves," said Collyns.

Brazil announced in March that it wouldn’t renew its debt agreement with the IMF. But the country still must repay some US$ 15 billion from past loans, and the IMF monitors Brazil’s economic performance.

Mercopress – www.mercopress.com


  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


You May Also Like

Brazil Arrests American Charged with Pedophilia in Copacabana

The little Brazilian boy, 9, told his classmate what the old man had done ...

Best-seller Books, Plays and Movies

By Brazzil Magazine RIO Mamãe Não Pode Saber (Mom Cannot Know)—Comedy. Family deep in ...

An American Temptation: US$ 600 Round Trip from Anywhere in the US to Brazil

US company American Airlines announced that it is offering a round-trip ticket to Brazil ...

Lula Scolds ‘Cartel of Powerful’ for Blocking Brazil’s Progress

Brazilian President, Luiz Inácio Lula da Silva, said that Brazil's booming ethanol business won't ...

Marble and Granite Have Their Day in Brazil

Today, May 24, is the first day of the 2nd International Business Roundtable for ...

Afro-Brazilian by Mário Freire

By Making the US a Racial Hell Brazil Can See Itself As Eden

Since late 1999, the people and culture of the Federal Republic of Brazil have ...

Prainha do Canto Verde, in Brazil's Northeastern state of Ceará

Brazil’s Small Beach Town Learns How to Bring Tourists and Bar Speculators

"People called me crazy," says João Fernandes Filho, remembering the launch of his small ...

With Meals at 43 Cents Brazil’s Community Restaurants Are a Hit

The Brazilian government plans to inaugurate seven more community restaurants by the end of ...

Before Banning Brazil’s Beef, Russia Was Biggest Client

Exports of Brazilian beef in natura to Russia from January to September of this ...

A New Book Celebrates Brazil’s Bandolinista Luperce

Luperce Bezerra Pessoa de Miranda was born in Recife, on July 28, one hundred ...