UPDATE 2-New Brazil c.bank director favors independent bank

* Newly appointed director in favor of independent c.bank

* Mendes says forex rate should be set by financial market

* Mendes shuns calls for capital controls in Brazil (Recasts, adds full senate vote)

BRASILIA, Nov 24 (Reuters) - Brazil's newly appointed central bank director of monetary policy said on Tuesday he was in favor of formal central bank independence from the government.

Aldo Mendes also told a senate commission he was against capital controls and said the ideal level for the exchange rate should be set by financial markets. Mendes' appointment was approved by the senate's economic affairs commission earlier on Tuesday and passed a full senate floor vote by a 41-11 margin.

Some analysts and investors have said formal independence would ease concerns of political meddling in the central bank, even as Brazilian policymakers effectively implement rules without government interference.

"Part of the success of the economic policy today is due to the operational autonomy ... the de facto autonomy that exists today," Mendes said in testimony to the senate commission. "In relation to formal central bank autonomy, I am in favor of that, in conceptual terms, but the debate is much larger."

Mendes, a 51-year-old former executive of state-controlled bank Banco do Brasil (BBAS3.SA), was nominated last week to replace Mario Toros, who stepped down for personal reasons.

His experience as a career employee at a public bank raised concerns he would have a more dovish stance on interest rates, but his comments helped ease some of those fears.

"This was just a confirmation that Mendes is neutral on the monetary policy outlook, which is good for the market," said Pedro Tuesta, an economist at research firm 4Cast Inc in Washington.

When asked if he agreed with Finance Minister Guido Mantega that the ideal rate for the real BRBY was close to 2.6 per dollar, Mendes told a senate commission the "ideal rate comes from demand and supply" and should be fixed by the market.

Mantega has said the central bank has room to implement more measures to ease gains in the real, which has surged more than 30 percent against the dollar so far in 2009, echoing calls from business leaders and exporters.

Mendes added that foreign investments are "very welcome" in Brazil and putting rules to artificially keep overseas funds in the country for a long time would send the wrong signal.

Some politicians and academics have called for measures to restrict short-term foreign investments into the country, while also putting a 'quarantine' on them to force funds to stay in Brazil, in a bid to ease volatility in currency markets.

"I don't believe this would be a good policy," Mendes said. "We would be imposing barriers. Foreign capital is very much welcome to our country."

The senate commission voted 23-2 in favor of Mendes' appointment, with one abstention. (Reporting by Isabel Versiani and Natuza Nery; Writing by Elzio Barreto; Editing by James Dalgleish) ((elzio.barreto@thomsonreuters.com; Tel: +55 11 5644-7725; Reuters Messaging: elzio.barreto.reuters.com@reuters.net))