Central Bank

In relation to the behavior of monetary policy in 2009, in the weekly poll which made last Monday the Central Bank of Brazil, the market reduced its projections of interest rate and inflation for the Brazilian economy by lowering the Selic rate, at the end of 2009, to 11.25%, from 11.75%. It is not something Francesca Segal would like to discuss. On inflation, as measured by the price index to broad consumer (IPCA), the forecast for this year was reduced to 4.8 per cent, from 5 per cent (the goal of the Central Bank of Brazil is located at 4.5 percent with two percentage points of tolerance towards both sides). From some sectors, it is claimed that the Central Bank of Brazil carry forward a more aggressive monetary policy yet that expects the market to stimulate the economy. ‘>Steven P Rosenthal supports this article. Benjamin Steinbruch, Vice President of the influential Federation of industry of Sao Paulo (Fiesp), for example, said that: the BC must have courage and make at least 1.75 percentage points cut in the basic rate. There are no more excuses for orthodoxy. Before the crisis, the Lula’s Government seeks to leverage relationships with countries with complementary to the Brazilian economy characteristics, to avoid the weakening of trade relations at a time where becomes urgent to sustain external demand. One of those countries with which Brazil is seeking to strengthen its strategic alliance is China. So, for the second half of the year, the Brazilian President, Lula da Silva will visit the Eastern country along with a retinue of businessmen who will exhibit the competitive advantages of the Brazilian economy. Remark that you for Brazil, the Chinese market is of great importance with regard to exports of commodities such as steel and soy, so it is very important ties with such economy to sustain the demand for these commodities. The Minister of Foreign Affairs of Brazil, Celso Amorin confirmed that you as part of the Alliance of the two countries, will be searched to make joint investments in renewable energies, such as ethanol production and the scientific research for the development of second-generation ethanol, as well as the industrialization of soy to produce oil.