* Brazilian president says industry needs cheaper capital
* Brazil must grow at least 4 percent a year, Rousseff says
* Improving competitiveness key goal of her administration
BRASILIA, Nov 20 Brazil is preparing to lower
the cost of capital and create more sources of finance to
bolster the competitiveness of its struggling local industry,
President Dilma Rousseff said in an interview published on
Rousseff told newspaper Valor Economico that her government
is working on measures aimed at local capital markets to reduce
the dependence of the country's private companies on loans from
state development bank BNDES, their main source of credit.
"We should have cheaper capital coming from the capital
market. Brazil will have to become more sophisticated. We must
have capital, we must have financial products that allow for
investment," Rousseff said. She gave no details on the measures.
This year the government has tried to stimulate new sources
of financing by offering tax breaks for investors who buy debt
linked to major infrastructure projects, which have historically
been very hard to finance in Brazil.
Since taking office in 2011, Rousseff has moved aggressively
to cheapen the cost of credit for Brazilian investors and
consumers, clashing with the powerful private banking sector.
Now, she is aiming to tap the still developing capital
market to raise billions of dollars. These funds will be used
for infrastructure projects urgently needed by Brazil to
increase the country's productivity and return to rapid growth
that made it a Wall Street darling.
Rousseff said her government was ready to unveil more
stimulus measures to assure that Latin America's largest economy
grows at a "minimum" pace of 4 percent per year.
Brazil is expected to grow just 1.5 percent this year after
hitting a two-decade record of 7.5 percent growth in 2010.
Her government has already provided an avalanche of stimulus
measures like tax breaks and subsidized loans to revive an
economy that has remained nearly stagnant for over a year.
Brazil has slashed interest rates to record lows and taken
actions to depreciate its real currency that was considered one
of the most overvalued in the world and a hurdle for businesses
struggling to compete with foreign rivals.
Brazilian authorities will not allow the real to
overappreciate again and hurt local industries, she said.
Rousseff denied that her government is managing the real and
ditching a decade-old strategy that combines a free-floating
currency with inflation targeting and fiscal discipline.
She added, however: "Every government should be pragmatic. A
government cannot just stick to a recipe."