Amid government criticism of interest rates, Senate commission approves invitation to hear Campos Neto
Interest rate is at 13.75% a year, and members of the government have said that there is room for the BC to lower the Selic rate. Central Bank committee that defines the level will meet next week. The President of the Central Bank, Roberto Campos Neto, during a session in the Senate Adriano Machado/Reuters The Economic Affairs Committee (CAE) of the Senate approved this Tuesday (14) an invitation for the President of the Central Bank, Roberto Campos Neto, to explain the current basic interest rate of the economy, the Selic. As it is an invitation from the committee and not a summons, Campos Neto is not obliged to attend. However, in these cases, guests usually comply with the request so as not to create unease with senators. The approval of the application takes place amidst various criticisms of Selic by government members. President Lula himself and the Minister of Finance, Fernando Haddad, have stated that there is room for the BC to reduce the rate. They estimate that the high rate of investment makes it difficult for investments in the country and inhibits the recovery of the economy. The Selic is currently at 13.75% per annum, and the Monetary Policy Committee (Copom) will meet next week to define whether to maintain the rate at the current level; it reduces; or it increases. According to Valdo Cruz’s blog on g1, the tendency is for the Copom to keep the Selic at 13.75%, but signal a rate cut in the near future. As president of the Central Bank, Campos Neto is a member of Copom, the body responsible for setting the Selic rate. It is not up to him, alone, to define the rate, but the BC president votes within the collegiate. The Selic definition is related to inflation control. That is, if inflation is on the rise, above the target, the Copom tends to increase the Selic rate. If inflation is in line with the target, the Copom tends to reduce the rate. Roberto Campos Neto has stated that the Central Bank “does not like high interest rates” and does not act in a political manner. The session Before the vote, senator Plínio Valério (PSDB-AM) said he did not see the need for an invitation to Campos Neto, since, at least twice a year, the BC president has to go to Congress to provide clarifications. The president of the Economic Affairs Commission, Vanderlan Cardoso (PSD-GO), responded that, although Campos Neto has been “always solicitous” in meeting the Senate’s demands on the interest rate, the technical advisory of the CAE informed that it was necessary to vote on the application. During the discussion, Senator Sérgio Moro (União Brasil-PR) defended the approval of the invitation to the president of the BC, adding that Campos Neto has managed the Central Bank “well” even in the face of what he called the “turbulent seas” of the economy.