The president of the Central Bank (BC), Roberto Campos Neto, said on Monday (13) that he is against changing the inflation target established by the National Monetary Council (CMN), of which he is a member. Campos Neto spoke on the subject three days before a meeting of the CMN itself in which the subject tends to be debated.
“If we make a change now, without an environment of tranquility and an environment where we are reaching the goal easily, what will happen is that you will have an effect contrary to the desired one”, predicted the economist, in his participation in the Roda Viva program, by TV Culture.
::Understand the dispute between Lula and the Central Bank::
The CMN has a meeting scheduled for Thursday (16). This will be the first of the collegiate after the inauguration of Luiz Inácio Lula da Silva (PT) and the change in the body’s composition after the appointments made by the president.
The CMN is composed of: Campos Neto, president of the BC – appointed by former president Jair Bolsonaro (PL) – and also the current Minister of Finance, Fernando Haddad (PT), and the current Minister of Planning, Simone Tebet (MDB) – appointed by Lula.
::Popular movements are preparing actions against BC policy and for raising the minimum wage::
understand the crisis
Lula has criticized Campos Neto because of the high basic interest rate of the Brazilian economy, the Selic. Today, the Selic is at 13.75% per annum, the highest real interest rate in the world (interest discounted for inflation).
According to the president, with this Selic, the Brazilian economy cannot resume growth. Therefore, he advocates a reduction.
Campos Neto, on the other hand, has said that the Selic is at this level so that the BC can meet the inflation target. Currently, the 12-month cumulative price increase index stands at 5.77%. The CMN established that the index should be at 3.25% at the end of 2023, with a maximum of 4.75%.
::Rising food prices put pressure on January inflation::
This scenario reinforces the expectation that the target will only be met with a further increase in the Selic rate. Some economists defend, as an alternative, the revision of the target – which Campos Neto is against, as he himself said.
nod to the government
Campos Neto was questioned on Roda Viva for his relationship with Bolsonaro and his ministers. He was appointed to the position at the Central Bank by the former president and, in January, after Lula took office, he was still part of a group of whatsapp former members of the previous government.
He minimized the relationship with bolsonaristas. He said that he established relations with former government ministers because of his work, but that this did not influence his performance at BC.
::Economist criticizes Central Bank for maintaining the current interest rate: “it slows down the economy”::
Asked if he was wearing the shirt of the Brazilian national team when he voted in the last elections, he dodged: “Voting is a private act”, he said. “I tried to differentiate what is private life, what is public life”.
“The Central Bank is a State institution, it needs to work with the government at all times. I will do everything in my power to bring the BC closer to the (current) government”, added Campos Neto, in a nod to the current president.
Editing: Vivian Virissimo
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