Amid the debate over interest rates, Campos Neto takes part in this Tuesday’s Senate hearing | Economy

On Tuesday (25), the head of the Central Bank, Roberto Campos Neto, will participate in a hearing in the Senate Economic Affairs Committee.

He was called upon by the senators to explain the maintenance of the Selic rate (the base interest rate of the economy), at the level of 13.75% per annum. This is Selic’s value since August 2021.

The value of the Selic is decided at the meetings of the Monetary Policy Committee (Copom) of the central bank. President Luiz Inácio Lula da Silva criticized the Campos Neto administration. As for Lula, Seles could have already fallen. The president argues that the current level is detrimental to the country’s growth.

“Our interest rate is very high. In Brazil, the Selic rate, which is a reference, is 13.75%. No one borrows money at 13.75%, no one. And there is no cheaper money,” Lula stated during an event in Portugal. Monday (24).

Allies of the president and members of the government echoed Lula’s criticism of the central bank. Campos Neto, in turn, emphasized that Cilic’s rate of 13.75% is necessary to contain inflation.

In an event on Friday (21), Campos Neto said that “the yearning for lower interest rates is political, but our action is technical”. He pointed out that the conditions for falling interest rates, which currently stand at 13.75%, have not yet been met.

According to blogger Julia Doileby, Campos Neto’s speech within the government was seen as a sign that Cilic might not fall short in the short term. With this, Lula calls on members of the government to search for alternatives that can compensate for monetary policy. One way out could be to lower the interest rates charged by public banks.

Campos Neto has been appointed to this position in Jair Bolsonaro’s government. Also in the previous government, British Columbia’s autonomy was approved. Thus, Lola cannot change the bank’s leadership.

Before 2021, the Central Bank was not independent, and the President of the Republic could replace the head of the institution. Now, the head of the central bank has a four-year term.