* 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 Tuesday.
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."