mr lopes ’ speech before the economic affairs commission of the federal senate summary of a speech by the new president of the central bank of brazil, mr francisco lopes, before the economic affairs commission of the federal senate in brasilia on 26 / 1 / 99. translated from jornal do brasil of 27 / 1 / 99. inflation i am sure inflation will not come back. of course, there will be some adjustment in relative prices but there is no possibility of resuming the old inflationary process. we will have to put in place tight monetary policy and prevent any forms of indexation, opportunism or speculation. as the brazilian economy is relatively closed - imports correspond to 8 % of gdp - a devaluation of 50 %, ( i. e. the exchange rate stabilising at the very depreciated level of r $ 1. 80 ), would add about 4 to 5 % to the rate of inflation. overvaluation of the real the use of the exchange rate anchor made an exchange rate overvaluation inevitable. nevertheless we had imagined it would be possible to shift from the mini - band regime to the free floating regime in a rather gradual way, while the economy was still attracting foreign capital. but reality sometimes frustrates the best intentions. with the benefit of hindsight ( after the asian and russian crises ), the widening of the exchange rate band in april last year, which widened the amplitude of the exchange rate fluctuation by 1 % per year, was a rather timid movement. but it is easy to be wise after the event. wider exchange rate band the attempt to shift from the mini band to the wider band lasted for 48 hours. we knew that it had limited chances of success. within four days we had lost almost us $ 6 billion in international reserves. and the free floating exchange rate regime, supported by a solid fiscal stance, has become our new objective. the idea of widening the band under the model designed and issued as of january 13th was good, but unfortunately it came too late. centralisation of foreign exchange transactions suggestions about centralising exchange market operations shock me. because centralising exchange market transactions in the central bank amounts to having no foreign exchange regime, it leads the country to the moratorium, with the re - negotiation of debts. credit lines to brazil would be cut. it means violating the rules of the game. it would be a completely arbitrary act which would have terrible consequences. economic growth the first semester

with the implementing partners, through collaboration, research, and innovative solutions, we can break down barriers and contribute effectively to creating an inclusive, sustainable financial ecosystem where individuals, households, and businesses achieve financial resilience, stability, and better financial well - being. to achieve these goals, this year, the gpfi has been working on three important and challenging deliverables. first, let's look at the case of preparing a new action plan for financing micro, small and medium - sized enterprises. while we seek to reducing the financing gap for these enterprises, we need to work on removing constraints to their access to financing. this includes addressing the misleading perception of higher risk associated with them, ensuring the suitability of financial products and services to their specific needs, and improving the availability of reliable data. overcoming these challenges requires joint efforts from governments, financial institutions, and entrepreneurs. second, in the case of financial inclusion, after having made significant progress for individuals and households, we know how increasingly challenging it is to reach the last mile, even with the new technologies available. the advance towards last - mile inclusion requires significant efforts in research to understand these segments in depth, their context, and their needs. it requires even more innovation - not just technological innovation - to ensure that this inclusion is of high quality, meeting their needs in an assertive and affordable way. this means delivering financial products and services responsibly and with robust consumer protection in place. achieving all of these is not trivial. third, on the financial well - being deliverable, i truly believe in the importance of this achievement for the future of financial inclusion. thinking about our policies from the perspective of their ultimate results is always more challenging. hence, having financial well - being as a guide for financial inclusion initiatives is essential if we seek effectiveness and quality in our efforts toward a more inclusive financial future. therefore, i am very glad to hear that the financial well - being subcommittee has made enormous progress on establishing a working definition and a preliminary conceptual framework for financial well - being. an outcome only possible, i was told, through the collaborative efforts of our implementing partners, subcommittee country members, and her majesty, queen maxima herself. 2 / 3 bis - central bankers'speeches for all these achievements, the immense value of collective work cannot be overstated. i know that in such a large and heterogeneous group, discussions can be long, tiring, and heated. i am also sure that these conflicts in the