Brazil will be able to improve its competitiveness amid the current international crisis thanks to a forthcoming reduction in the cost of energy and the depreciation of the real, experts agreed Tuesday at a seminar in Rio de Janeiro.

The reduction in the cost of production to make energy cheaper and increase competitiveness with a cheaper currency will allow Brazil to maintain its exports in a situation of global restriction, according to authorities, analysts and economists who participated at the Bloomberg Brazilian Economic Summit.

The experts made reference to the measures that the government will announce on Wednesday to deal with the international crisis, among which are reducing utility rates and taxes on energy.

For Welber Barral, former foreign trade secretary and director of the Coalition of Brazilian Industries, Brazil's energy costs are very high and reducing them will benefit all sectors, especially manufacturing.

The chief economist for emerging markets with Credit Suisse Brasil, Nilson Teixeira, said that another positive effect of the energy cost reduction is that it will allow the Central Bank to continue reducing interest rates to spur growth without worrying about inflation.

Analysts also agreed that the fall of the real against the dollar, from 1.60 to the greenback in mid-2011 to 2.02 reais to the dollar currently, will also significantly raise Brazil's competitiveness.

"The Central Bank is comfortable with the current level of the dollar and the government is ready to pay a premium to maintain its elevated reserves and prevent the (Brazilian) currency from appreciating," Standard & Poor's director of sovereign ratings for Latin America, Sebastian Briozzo, said.

Despite the depreciation of the real against the dollar in recent months, experts feel that the Brazilian currency is still significantly above the value it should have.

Barral cited a study by the Getulio Vargas Foundation, according to which the real is overvalued by as much as 30 percent vis-a-vis the dollar and the Chinese yuan. EFE