MercoPress. South Atlantic News Agency

Influential Brazilian banker says further weakening of the Real “would be better”

Luicano Coutinho, president of BNDES and advisor of President Rousseff

Luciano Coutinho president of Brazil’s state development bank BNDES, said the country has benefited from the recent weakening of its currency and a further drop would be better, according to newspaper Folha de Sao Paulo.

Steep interest rates, one of the challenges that have long faced Brazilian industry, are coming down, Coutinho said, according to an interview published Sunday in the Sao Paulo-based newspaper. The nation is moving toward a level of interest rates compatible with its macroeconomic condition, he said.

However Coutinho also charged against Brazilian businessmen who, he said are too pessimistic at the moment because they are highly affected by short-term considerations.

Brazil’s government has taken short-term measures to help struggling industrial sectors survive, Coutinho said, according to Folha. But it is also studying longer-term measures such as tax measures and boosting public investment.

“Businesspeople pessimism” and the “market cyclothymiacs” which are most holding back the recovery of the Brazilian economy said the president of BNDES.

“The manufacturing sector is very cyclothymic, the market is cyclothymic: euphoria when things are fine and when things turn tough it falls in a spiral of pessimism more serious than what it should”, said Coutinho.

He also downplayed the “delicate” moment syndrome. “I think the situation is rich in positive challenges; we’re heading to a level of interest rates in line with our macro-economic condition”.

Coutinho, a close advisor of President Dilma Rousseff said that Brazil “is one of the few countries with a very low nominal deficit, 1%; all developed countries have a deficit in the range of 6% to 8% of GDP or even more”.

As key role players in promoting growth Coutinho mentioned the private financial system and the capital market which have become a “border of high yield investments”.

“This combination will enable us to grow at higher rates, which will be even higher as we manage to address the two main challenges: manufacturing competitiveness and the taxing structure”.

“It is essential for Brazil to have a strong industry, because it helps create high qualified jobs both in pre and post manufacturing process”, concluded Coutinho.

The Brazilian BNDES is a powerful tool used by the government to support corporations and industries with virtually zero interest loans and has an annual turnover greater than the World Bank.