Brazil is now able to make its own budget decisions free of the interference of the International Monetary Fund (IMF), after it has paid its debts to the IMF two years ahead of schedule, Brazilian President Luis Inacio Lula da Silva said on Thursday.

"We repaid the money to show the world that this country has a government and it is the owner of its own nose," Lula told a meeting of military officers.

"It seems improbable, even impossible, that in such a short time Brazil has been able to decide that it does not want another IMF deal," Lula said.

Brazil was at a crucial point in its history, as the 2006 general elections are drawing near, the president said, adding that it is important that Brazil does not repeat its past errors.

On Tuesday, Brazil's Finance Ministry said it would pay the 15.5 billion U.S. dollars it owed to the IMF, clearing all the debts due in 2006 and 2007. The early payment will save Brazil 900 million dollars in interest payments.

However, Brazil remains heavily indebted even after the payment, with a debt of 432 billion dollars, or 51 percent of its gross domestic product (GDP). Nevertheless, it is a considerable reduction from 2003, when its debts made up 57 percent of the GDP.

Source: Xinhua