President of Brazil’s Central Bank opposes revising inflation targets and lowering interest rates

The president of the Central Bank of Brazil, Roberto Campos Neto, ratified yesterday, Tuesday, his opposition to revising the inflation targets for 2023 and allowing a decrease in the basic interest rate of the Brazilian economy.

Campos Neto responded in this way to the intention of President Luiz Inácio Lula da Silva’s government, which seeks to revise the 2023 inflation target and reduce the benchmark interest rate, which now stands at 13.75 percent per annum.

“It is always good to debate, but I think we are at a time when it would not be good to do experiments,” said the president of the Central Bank of Brazil, a position appointed by former President Jair Bolsonaro (2019-2022).

The Brazilian official is the first independent president of the monetary authority, and his responsibility should conclude at the end of 2023.

Campos Neto has received different criticisms from President Lula da Silva due to the position of keeping the referential interest rate at high levels with the argument of “cooling the economy”.

Lula da Silva has described as “shameful” the level maintained by the monetary entity with respect to the benchmark interest rate, considering that there are no inflation risks and that the measure slows down the progress of the Brazilian economy.

The central entity’s president defends the institution’s legal status approved by the previous government, which grants it independence from the Executive, citing other countries as examples of autonomous models of the monetary authority.

The Central Bank of Brazil has set an annual inflation target of 3.25 percent in 2023, with a tolerance margin of 1.5 percentage points above or below that value.