Lula criticizes interest rate policy, questions Brazil’s Central Bank’s actions
Brazilian President Luiz Inácio Lula da Silva criticized the head of the Central Bank, Roberto Campos Neto, accusing him of working against the interests of the Brazilian economy.
Lula’s comments came after the Central Bank’s decision to maintain the basic reference interest rate at 13.75 percent per annum.
Lula stated that the high interest rate was irrational, with inflation currently at 5 percent.
He emphasized that the disagreement was not solely between the government and the Central Bank but represented the sentiment of Brazilian society.
During a press conference in Rome, Italy, Lula directed his criticism at Campos Neto, who was appointed by former President Jair Bolsonaro and has a mandate until 2024.
Lula called for a review of the Central Bank’s institutional performance and questioned the reasons behind keeping the interest rate high.
The Brazilian Central Bank’s inflation target for this year is 3.25 percent, with a tolerance range of up to 4.75 percent.
The current accumulated inflation rate over the past 12 months stands at 3.94 percent, with the financial market predicting a price increase of around 5 percent for 2023.
The Monetary Policy Committee of the Central Bank defended its decision, stating that the current approach is characterized by “patience” and “serenity” to maintain control over inflation.
Lula’s remarks highlight a divergence of views on interest rate policy and raise questions about the Central Bank’s role in shaping Brazil’s economic landscape.
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This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief