Luiz Inácio Lula da Silva, the former President of Brazil, expressed concern over the high interest rate of 13.75 percent maintained by the Central Bank, warning that it could lead to the bankruptcy of many companies.
He criticized the rigidity of inflation targets and called for a change in the mechanism.
Lula emphasized the challenges companies face in raising funds for investments with such high-interest rates, stating that the current situation could lead to numerous bankruptcies.
He argued that it is necessary to reconsider the rigid inflation targets and adopt a more flexible approach.
According to Lula, Brazil should set achievable goals to adapt monetary policy to the economic reality and the aspirations of society.
He suggested that the focus should be on a target that can be realistically reached.
Currently, the Central Bank has set an inflation target of 3.25 percent for 2023, with a ceiling of 4.75 percent.
In response to Lula’s concerns, the Senate Economic Affairs Committee approved a summons to Roberto Campos Neto, the Central Bank President, to explain monetary policy.
Campos Neto, appointed by former President Jair Bolsonaro and with a Senate mandate until 2024, will address the committee’s concerns.