WASHINGTON -(Dow Jones)- The International Monetary Fund board on Friday praised Brazil for its economic policy and performance, saying the country's central bank has room for further steady easing of monetary policy.

Following a routine monitoring review, IMF directors said Brazil is well placed for "continued favorable economic performance" as the economy slowed to a more sustainable pace of growth this year.

"The combination of high public sector primary surpluses, inflation targeting and a flexible exchange rate regime has proven highly successful in reducing vulnerabilities and keeping financial market confidence high, despite uncertain political conditions," the IMF said.

Earlier this week the IMF applauded Brazil's decision to repay ahead of schedule its outstanding debts to the Fund, totaling about $15.5 billion . (MORE TO FOLLOW) Dow Jones Newswires 12-16-05 1350ET Copyright (c) 2005 Dow Jones & Company, Inc.