MNI BRIEF: Fiscal Sustainability Key To Rate Cuts- Campos Neto

Brazil's Central Bank governor, Roberto Campos Neto, said Friday that fiscal sustainability is key for price stability and reducing interest rates, adding that adjustments through revenue increases instead of expense cuts are less efficient.

"Public debt increases lead to lower growth. In this sense, it is important to deepen and develop capital markets. Fiscal sustainability is fundamental for price stability and for reducing interest rates," he highlighted at the XII Lisboa Forum, in Portugal.

"Excessive public interventions in the economy create distortions and inefficiency in resource allocation, leading to lower growth," Campos Neto said. "Adjustments made on the revenue side are generally less efficient and result in more inflation and less growth," he added. (See MNI INTERVIEW: Brazil's Copom On Hold Until December - Kfoury)