Bank official: Brazil capable of curbing inflation

Brazil is capable of controlling inflation as Wednesday's move to raise the basic interest rate shows, Brazilian National Development Bank President Luciano Coutinho said Thursday. Brazil's Central Bank on Wednesday raised the interest rate for the fifth time this year to 9.5 percent. The rate has been raised a total of 2.25 percentage points since the beginning of the year. The increase means Brazil once again has the highest real interest rate in the world, but Coutinho said the higher rate should not affect investment in Brazil. On Brazil's currency depreciation against the U.S. dollar, he said a weaker Brazilian real is better for export. "It will help Brazil recover the export capacity that it lost over the past few years," he said. A cheaper real would additionally help cut the current account deficit Brazil has been dealing with, he added. Coutinho also spoke of the possible recovery of the European and U.S. economies, saying it would help achieve more balanced global economic growth and compensate the lower prices of commodities which make up a large share of Brazil's exports.