in better conditions than most countries, but also in a much better shape than in the past. one of the distinguishing features of the brazilian economy is its prudential regulatory framework. the vigilant stance of the central bank prevented the development of see http : / / www. oecd. org / document / 59 / 0, 3343, en _ 2649 _ 34349 _ 41966331 _ 1 _ 1 _ 1 _ 1, 00. html, 2009. january 12, disequilibria and excesses that emerged in several other economies. we did not let the markets adopt risk taking attitudes that led to the losses and problems that many countries are facing today. in fact, the brazilian framework is considered a model for prudential regulation and regarded as an example to be followed by other regulatory authorities. that does not mean that brazil is not being hit or suffering the impacts of the financial turmoil. but the brazilian government is prepared to react and take all the necessary measures to tackle the crisis. in conclusion, a floating exchange rate is no cure - all remedy for all economic ills. but it is certainly the best regime for a large, relatively closed, economy like ours. if brazil had not floated the brl in 1999, it would surely have done so since then, and possibly in more adverse conditions. for all the above, this 10th anniversary is worth celebrating. thank you very much.

henrique meirelles : ten years of floating exchange rates in brazil speech by mr henrique meirelles, governor of the central bank of brazil, to celebrate 10 years of floating exchange rates in brazil, central bank of brazil, brasilia, 19 january 2009. * * * it is an honor for me to speak to you today, which marks a special date in brazilian economic history. that is because ten years ago yesterday, january 18, brazil floated the real ( brl ), breaking with decades of exchange rate manipulation and repression by the government. i will start with some facts and then offer an assessment of the regime so far. first, let me address the global context. since its inception the floating exchange rate regime has weathered many storms, starting with the bursting of the high tech bubble in 2000, the argentine crisis in 2001, the september 11th attacks and, recently, the effects of the 2008 global financial crisis. on the other hand, the global environment was on the whole favorable between 2003 and 2007. so, it is fair to say that in its first ten years the floating brl has faced a pretty diverse external environment, neither persistently challenging nor consistently favorable. now, let us consider the behavior of the exchange rate itself. the floating brl has averaged $ 2. 34 against the usd, within a range of $ 1. 32 on the outset, to $ 3. 96 on 22 october 2002. it is nothing but a sheer coincidence that the nominal exchange rate currently stands very close to its 10 - year average. the real effective exchange rate has also oscillated substantially, reacting to shifts in fundamentals such as the terms of trade, risk aversion and underlying capital flows. compared with a long - term average of 100, the real effective exchange rate ( measured in terms of brl ) has moved within 58, on october 2002, when the brl was particularly weak, to 125 in august 2008, when it was stronger than the mediumterm norm. regarding the balance of payments, the current account balance has averaged - 1. 0 % of gdp, compared with a long - term average ( since 1970 ) of - 2. 1 %. net fdi inflows have also performed relatively well, with an average of 3. 0 % of gdp, compared with 1. 5 % since 1970. thanks to the improvement in the balance of payments the central bank has been able to accumulate sizeable foreign exchange reserves, which stand at about $ 205