MercoPress. South Atlantic News Agency

Brazilian banker “has no plans to resign”.

Brazil's Central Bank president Henrique Meirelles, said Friday that he was not resigning and insisted he had President Luiz Inacio Lula da Silva's “full support” in the face of allegations of tax evasion.

"I don't plan to resign," Mr. Meirelles told O'Globo television network as he explained the details of financial transactions conducted while he lived in the United States and which opposition politicians are citing as evidence of wrongdoing. "In all our conversations, the president has not only offered support, he has also expressed his indignation at these allegations" added Mr. Meirelles.

The central bank president added that he had received similar backing from Finance Minister Antonio Palocci.

Last Thursday the online edition of the weekly Veja magazine reported that Mr. Meirelles transferred $50,000 between two of his U.S. bank accounts in 2002 shortly before returning to Brazil to run for political office.

Mr. Meirelles then head of global banking at U.S.-based Fleet Boston, returned to Brazil in 2002 to run for Congress for the state of Goias on the ticket of the center-right PSDB, a seat he won. President Lula who was victorious by a landslide in 2002 as standard-bearer of the leftist Workers Party, or PT, asked Mr. Meirelles to join his administration in January 2003.

Mr. Meirelles also expressed annoyance with what he called an open violation of bank secrecy regulations and tax returns privacy.

Opposition politicians and some media have insisted that Mr. Meirelles should resign for "ethical reasons". But Lula's administration and the PT say those demands are "excesses" arising from the campaign for the October 3 municipal elections which will be vital in determining the political map of the country in anticipation of the 2006 presidential race. "Some people are committing a crime by using confidential information and making it available to the public" argued Mr. Meirelles adding that "those who have doubts about my tax statements should address the Federal Revenue Service, but in public the president of the Central Bank will only openly discuss what is his duty: monetary policy". "All my earnings in the United States were declared and the taxes paid" and "I'm one of the few Brazilian who have succeeded overseas and has returned to help the people of this country".

The Sao Paulo stock market fell Thursday on the news of additional allegations against the Central Bank president and the Brazilian currency Real dipped sharply against the dollar.

Brazilian analysts and investors credit conservative economist and experienced international banker Mr. Meirelles with playing a crucial role in bringing financial stability and certainty to Brazil during the first 19 months of the Lula administration. However this is the third time in two weeks that he has been in the news headlines.