Brazil will pay off its remaining 15.5 billion U.S. dollars of debt to the International Monetary Fund (IMF) two years earlier, the country's Finance Ministry said in a statement on Tuesday.

According to the statement, the move to cover the debt with the country's foreign reserves, which currently stand at 67 billion dollars, was suggested by Brazil's Finance Ministry and the Central Bank and approved by President Luiz Inacio Lula da Silva.

The statement said the move will strengthen Brazil's external financial balance and boost its economy, and save Brazil more than 900 million dollars in interest.

In coming days, the central bank will give details of the planned operation which the bank wants to complete by the end of this year.

IMF head Rodrigo Rato said the move showed the ever increasing health of Brazil's economy and "especially continuing substantial trade and current account surpluses and strong capital inflows which have greatly boosted reserves and reduced external debt."

However, Brazil remains heavily indebted, with 432 billion dollars or roughly 51 percent of its GDP despite that the amount has been reduced from 57 percent in 2003.

The government of Luiz Inacio Lula da Silva announced at the start of the year that it did not want to renew its IMF deal signed in mid-2002.

Source: Xinhua