Brazil’s Central Bank chief affirms Government’s correct course, cautions patience needed for interest rate reduction

Roberto Campos Neto, the President of the Central Bank, expressed on Monday (12) that the government’s economic team is correctly managing inflation and public expenses as they prepare to vote on the new fiscal framework scheduled for June, as per the reporting Senator, Omar Aziz (PSD-AM).

Campos Neto suggested that conditions conducive to initiating a new cycle of lowering the Selic interest rate are beginning to materialize, however, he stressed the importance of patience in achieving the necessary outcomes.

“The process isn’t automatic and I cannot predict its exact nature, timing or outcomes. We observe that the climate is improving, interest rate futures have already seen a dip, and the exchange rate is evolving positively.”

“At times, the concern over the exact timing spanning a few months is crucial for those involved in the real sector.”

“But for those on the other side, they must weigh: the impact of any sacrifices made, whether to wait longer or shorter and the eventual effects of the measure,” he elaborated.

Campos Neto emphasized that the process of reducing interest rates is neither instant nor short-lived, typically spanning “three to four years”.

He called for patience, reassuring that “things are moving in the right direction”. “A favorable scenario is developing, and some work is already underway,” he concluded.

The standing interest rate, at 13.75%, has consistently been a subject of government criticism since the start of the year.

The Monetary Policy Committee (Copom) is scheduled to convene next week to deliberate the future course of the Selic rate.

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