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Brazil's Temer says government not considering privatizing Petrobras

(Adds Temer, analyst comments, background on Brazil's economy)

By Anthony Boadle and Lisandra Paraguassu

NEW YORK, Sept 20 (Reuters) - Brazil's President Michel Temer said on Wednesday that despite his government's aggressive privatization agenda, state-run oil company Petroleo Brasileiro , a symbol of national sovereignty, would remain under government control.

Temer, speaking at a Reuters Newsmaker event in New York, also said that sprawling investigations that have led to corruption charges against scores of powerful figures - including him - show that Brazil's governmental institutions are independent and working well.

The leader of Latin America's largest nation also said the fight against corruption was giving investors more confidence to do business in Brazil and this was being reflected in the nation's benchmark stock index trading near all-time highs.

"It was an important and daring decision to open Eletrobras capital to private investors," Temer said, referring to a decision announced last month to sell a controlling stake in Centrais Eletricas Brasileiras SA, Brazil and Latin America's largest utility.

However, he ruled out a similar step with the state oil company, known as Petrobras, saying it held "a very strong symbolism for Brazil."

Temer has been charged with graft based on the plea-bargain testimony of the owners of the world's largest meatpacker, JBS SA.

They accused him of taking bribes in return for political favors and of conspiring to buy the silence of a witness who could implicate the leader.

Temer has repeatedly said he is innocent of any wrongdoing. He said at the Reuters event he was not concerned about being charged with racketeering and obstruction of justice last week.

During the wide-ranging, 45-minute discussion at the headquarters of Reuters, Temer also said that the Mercosur trade bloc of South American nations hopes to reach a trade deal with the European Union by the end of the year.

Investors attending the event praised Temer's openness about the corruption cases against him and for his determination to pass a pension reform bill, even though the president gave no indication of when that could happen.

Analysts expect the bill to be watered down to its bare bones to be able to clear Congress this year.

"That's enough to keep markets satisfied and to fend off a number of downgrades in credit ratings," said Alejo Czerwonko, emerging markets strategist at UBS AG. (Reporting by Anthony Boadle and Lisandra Paraguassu in New York; Writing by Brad Brooks; Editing by Daniel Flynn and Bill Rigby)