(Xinhua)
Updated: 2008-02-22 11:30

RIO DE JANEIRO - Brazil's reserves are enough to pay its external debt, both in public and private sectors, Brazil's central bank said in a statement on Thursday.

According to the bank, the country's international reserves and assets overcame its external debt by US$4 billion. It meant that "the country has become an external creditor, an unprecedented feat in its economic history," the central bank said.

When hyperinflation happened in the country in the late 1980s, the Brazilian government declared moratorium and investors fled away.

Analysts believe that Brazil's new condition reduces the risk of investing there, which will allow it to get "investment grade" from rating  agencies like Standard & Poor's and Moody's.

Brazil's external debt amounted to US$165.5 billion in 2003, but it has been decreasing over the past four years, as its economy grew and the government repaid creditors constantly, sometimes in advance.

Brazil's international reserves increased 110 percent in 2007 and reached US$180.3 billion last December.

The central bank added that the new scenario serves to "dissipate the impact" of the current volatility in foreign markets and the economic slowdown abroad.