* Currency management helping protect local industry-Mantega
* Inflation targeting, fiscal discipline still key
* Says does not see risk of inflation breaking target
SAO PAULO, Oct 24 Brazil's Finance Minister
Guido Mantega said in an interview published Wednesday that
while inflation targeting and a solid fiscal policy would remain
"permanent and fundamental," Brazil's floating exchange rate
"depends on what the rest of the world is doing."
"Our system is a dirty float, same as everyone's," Mantega
told local newspaper Valor Economico, adding that currency
management would last as long as necessary to defend the country
from a global exchange rate conflict.
"We cannot continue watching as others take ownership of our
market and bring down our industry," he said.
Mantega added that the weaker exchange rate, combined with
recent tax breaks and cuts in energy prices, has put industry on
a more competitive footing.
Brazil's currency, the real has been trading in a
narrow band between 2.01 to 2.05 to the U.S. dollar since early
July, with the central bank often stepping in to limit gains in
the real through the offering of reverse currency swaps.
Investors have been questioning Brazil's commitment to the
so-called "tripod" of economic policies -- inflation targeting,
fiscal responsibility, and a floating exchange rate -- which has
been considered central to the country's economic stability
But Mantega said he did not see inflation posing a risk of
breaking the 6.5 percent target ceiling, partly due to the lack
of inflation pressure from abroad, and that the government was
not considering relaxing the target.
Although Mantega reinforced Brazil's commitment to fiscal
targets, he suggested that the government could be flexible on
this year's goal due to the deduction of investment