BC president responds to Lula’s criticism and says independence lowers interest rates

After intense criticism since the beginning of the week by President Luiz Inácio Lula da Silva (PT), the president of the Central Bank, Roberto Campos Neto, came out in defense of the institution’s decisions during an event in Miami, in the United States, this Tuesday (8).

Campos Neto said that the main reason for the BCB’s autonomy is “to disconnect the monetary policy cycle from the political cycle, because they have different lenses and different interests”. “The more independent you are, the more effective you are and the less the country will pay in terms of monetary policy cost-effectiveness”, he added.

The statement came hours after President Lula spoke during a meeting with representatives of independent vehicles, in which he said that Campos Neto “owes explanations to the National Congress, to whom he was appointed. It is true that we have two people on the National Monetary Council and there are more people for us to appoint to the Central Bank”.

The president also said that he only met Campos Neto once and hopes that the Ministers of Finance, Fernando Haddad, and Planning, Simone Tebet, are “following the situation in Brazil”.

“I don’t know him well, I only met him once, I always assume that people are of good faith, of good will. He wants to get it right, fix the Brazilian economy, that the economy needs to grow again, that interest rates need to be accessible by Brazilian investors. I hope that Haddad is following, Simone is following and that he himself is following the situation in Brazil”, he said.

Moments later, the Minister of Finance, Fernando Haddad, softened the situation in an attempt to approach Campos Neto by praising the content of the minutes of the Monetary Policy Committee (Copom) that explains the decision to maintain the basic interest rate (Selic) at 13.75% per annum. According to him, the Central Bank’s economic team makes “important points about the work of the Ministry of Finance”, in a “friendly” and “analytical” explanation.