© Reuters. Guimarães (first right), alongside Lula and other government leaders in Congress 12/29/2022 REUTERS/Adriano Machado
By Eduardo Simões
(Reuters) – The leader of President Luiz Inacio Lula da Silva’s government in the Chamber of Deputies, José Guimarães (PT-CE), said on Thursday that the Central Bank needs to understand that Brazil has a new management and that there is a new economic policy underway in the country.
In an interview with CNN Brasil, Guimarães echoed Lula’s criticism of the current level of interest rates, at 13.75% a year, and said he considered it a “good idea” to invite BC president Roberto Campos Neto to debate the theme in Congress. At the same time, the leader said that the formal independence of the Central Bank, provided for by law, is not under discussion.
“Economic policy is what should guide economic agents and the monetary authority has to consider this, it is not above the law, it is not something apart from the economic reality of the country, from social reality”, said the leader to the broadcaster.
“The monetary authority has to live together and know how to mix, understand that Brazil has another government, it is another program that was elected, there are other guidelines, it is not the previous model”, he added.
Campos Neto was nominated for the presidency of the BC by the then Minister of Economy, Paulo Guedes, in the management of former president Jair Bolsonaro, defeated by Lula in the October presidential election. With the approval of the formal independence of the Central Bank by Congress, Campos Neto assumed a mandate that ends at the end of 2024.
Guimarães denied that the Lula government is seeking to revoke the BC’s autonomy and also rejected the idea that Campos Neto’s proximity to Bolsonaro and his supporters is the motivation for the current government’s criticism of the BC’s actions.
“What bothers us is the interest rate in the stratosphere. It bothers us. It’s not whether the president of the Central Bank, who has a mandate, went to a meeting or supports A or B,” he said.
“The autonomy or non-autonomy of the Central Bank is not under discussion, intervention at the Central Bank. No, the debate we need to have is what interest rate policy is compatible with the country’s economic reality.”
The leader also said that the tax reform will be fundamental to stabilize the economy and reiterated the speech by the Minister of Finance, Fernando Haddad, that he intends to present to the National Congress in April a proposal for a new fiscal framework for the country.
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Along the same lines as the ruling leader, the national president of the PT, deputy Gleisi Hoffmann, told CNN this Thursday afternoon that she does not see a reasonable justification for the current interest rate level, in addition to considering the current inflation target “unfeasible”.
He pondered, even though the Minister of Finance, Fernando Haddad, has publicly declared his intention to send the new fiscal framework this semester and has placed the tax reform as a priority.
“Why is there no sign so that we can make the country recover? Then the Central Bank decides to maintain the interest rate at 13.75% and says it will leave it until the end of the year. This is a crime against Brazil, does not take anything into account, not even the efforts that will be made by the government”, said the PT president to the broadcaster.
“We have a month of government, they already want me to present all possible projects. We just had to recompose Bolsonaro’s budget, which had no way to continue paying Bolsa Família, continue paying for vaccines “, he argued.
(Additional reporting by Maria Carolina Marcello; Editing by Maria Carolina Marcello)