(Recasts to add Rousseff, Levy comments, market performance)
By Guillermo Parra-Bernal and Aluísio Alves
SAO PAULO, March 30 (Reuters) - Brazilian President Dilma Rousseff and Finance Minister Joaquim Levy moved swiftly on Monday to quash concerns about their working relationship following a political stir over the weekend that threatened to derail the passage of austerity measures.
At a São Paulo event that gathered more than 600 business leaders, an adamant Levy said the government will get congressional approval for spending cuts this year and avert a debt rating downgrade.
The comments came after Levy told a private audience last week that Rousseff was well-intentioned but does not always act in "the most effective way," remarks that stoked fears of tensions between the two at a time when the government is struggling to push through budget cuts.
Levy said over the weekend that his remarks had been taken out of context, a view that Rousseff endorsed on Monday.
"There is no need to create a fuss about this. He has explained himself exhaustively," Rousseff said at an event in the northern state of Pará. "I'm sure he was misunderstood."
The benchmark Bovespa stock index accelerated gains and rose over 2 percent as both leaders spoke. Brazil's currency, the real, wiped out early losses and firmed 0.61 percent against the U.S. dollar.
Rousseff named Levy after winning re-election in October, pressed by rapidly deteriorating budget and current account deficits and what seemed an imminent downgrade of Brazil's credit rating. Their partnership has proved fruitful so far, with Levy winning additional responsibilities, sources told Reuters this month.
Levy also said on Monday he will meet Senate President Renan Calheiros to discuss the fiscal austerity push.
Levy, unlike Rousseff, is a strong advocate of free markets. He helped design a similar fiscal adjustment program under former President Luiz Inacio Lula da Silva, Rousseff's predecessor and political mentor.
Since her second term started in January, analysts and investors have closely monitored signs for any ideological differences might drive them apart. But Monday's comments reinforced the view that Rousseff is engaged with Levy's fiscal plan and is supporting it, traders said.
Levy said "there is mutual, very solid trust" between Rousseff and him. "We will continue to work together to finalize the adjustment program."
The Rousseff administration remains "strongly confident" that Congress will pass legislation aimed at streamlining spending, Levy said on Monday. Passage of those measures should help the economy resume growth later this year, he added. (Additional reporting by Renan Fagalde and Cesar Bianconi; Editing by Todd Benson and Richard Chang)