UPDATE 1-Cenbank coordinated actions eye liquidity - Brazil

Mon Nov 10, 2008 3:20pm EST
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SAO PAULO, Nov 10 (Reuters) - Discussions about coordinated actions by the world's central banks are mainly about managing liquidity, Brazil's Central Bank President Henrique Meirelles said on Monday.
Speaking after a meeting of the Bank of International Settlements in Sao Paulo, Meirelles also said there was a broad consensus among monetary authorities about the need for more rigorous regulation of the world financial system.
"Coordinated actions are basically about managing liquidity," he said at a news conference. "In markets that aren't functioning properly, with serious liquidity problems, central banks should adopt policies to manage liquidity, and in some cases do so in conjunction."
Meirelles added that Brazil is facing the current financial crisis in a "relatively better" position than other emerging economies, saying that domestic demand is doing "very well."
He also said Brazil was seeing a gradual recovery of credit levels and that the central bank was taking all necessary measures to shield the country from the financial crisis.
"Brazil is monitoring the situation and will adopt further measures at the right time, if needed," he said.
Brazil's central bank has taken a slew of measures since the onslaught of the credit crisis that included selling dollars on the spot foreign exchange market, dollar repurchase agreement sales and regular auctions of currency swaps.
Asked if Brazil was considering a fiscal expansion package to help offset the crisis, Meirelles said: "Brazil already has investment plans, and therefore an incentives plan, which is the PAC, announced last year."
Meirelles said the central bankers at the BIS meeting in Sao Paulo had agreed that the global market situation had improved since October but was still "far from normal."
He said there was also a consensus that global economic growth will slow "substantially" in 2009 and that there is no one-size-fits-all response to the crisis.
"Each country is adopting the measures that are appropriate for its own economy," he said, echoing remarks made earlier by European Central Bank President Jean-Claude Trichet.
(Reporting by Daniela Machado, Writing by Todd Benson; Editing by Theodore d'Afflisio)