Brazil’s President Luís Inácio Lula da Silva will meet Roberto Campos Neto, the country’s Central Bank leader.
They’ll discuss interest rate cuts to boost the economy. Campos Neto asked for the meeting in a letter.
Lula agreed and invited Finance Minister Fernando Haddad to join. The talk is set for Wednesday afternoon at the Presidential Palace.
People see this meeting as a goodwill act. This comes after the Central Bank started reducing interest rates.
Insiders say the timing is significant but chose to remain anonymous.
Lula’s team found Campos Neto aloof during the government’s transition. After taking office, Lula criticized the Bank several times.
He questioned its autonomy and slammed high interest rates. However, insiders say the mood has improved recently.
Last week, the Bank dropped the ckey rate by 0.5 percentage points to 12.75%. They plan to keep this up until the end of the year.
Six months into his term, Lula is shaping his strategy. Two more seats on the nine-member Bank board will open in December.
Earlier, Lula added allies Gabriel Galípolo and Ailton Aquino to the board. This marks the first board transition since the Bank’s autonomy law in 2021.
Campos Neto and two other directors will end their terms in 2024. Besides mending fences with Lula, Campos Neto could act as a go-between with the opposition.
One source noted his close ties to opposition groups.
Background
The meeting could be a game-changer for both the government and the Central Bank. This is an opportunity for Lula to recalibrate his stance on monetary policy.
Until now, his administration has been at odds with the Bank. Yet, the meeting suggests a more collaborative future.
Similarly, for Campos Neto, this is a chance to build bridges. Critics have often labeled him as distant and unyielding.
Aligning with the President could also give him more political leverage. The meeting may signal a new fiscal and monetary chapter in Brazil.