Campos Neto says dispute over interest rates is ‘first big test’ of Central Bank autonomy

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Responsible for setting the basic interest rate to contain inflation, the institution’s board has been criticized in recent months by President Lula and members of the economic area. In July, the first directors appointed by the PT took office. The president of the Central Bank, Roberto Campos Neto, said this Thursday (17th) that the institution is going through the “first big test” of its autonomy. According to Campos Neto, the moment is formed by the entry of new directors – the first appointed by President Luiz Inácio Lula da Silva – in a moment of debate on the appropriate level of the economy’s basic interest rate, the Selic — set by the BC to contain the inflation. “We are going through the first big test of the economy, an environment where the country is polarized. I would say it was a first big test. And we are in a process that changes two directors a year, and incorporates new directors that , sometimes they have strands of new thoughts, which they incorporate into the debate”, he declared, in an interview with Poder360. “But it is important to say that we are maturing this process and that, in this maturing process, we have learned a lot in terms of how to conduct debates, in terms of communication”, he continued. In early August, the Central Bank’s Monetary Policy Committee (Copom) decided to reduce the Selic rate from 13.75% to 13.25% per annum. The decision was taken by the majority, with Campos Neto tying the score in favor of a greater reduction – which was implemented. The two new BC directors, Gabriel Galípolo and Ailton Santos, appointed by President Lula, participated in the last Copom meeting and voted for a greater reduction in interest rates. It was the first cut in the basic interest rate in three years, which occurred after an improvement in inflation in recent months and also amidst criticism from President Luiz Inácio Lula da Silva. To define the basic interest rate and try to contain the rise in prices, the Central Bank is already targeting, at this moment, the target for next year and the objective, in 12 months, for the beginning of 2025. Selic rate takes six to 18 months to have full impact on the economy. In the communiqué, the Copom also said that, in the next meetings, it may continue making the Selic “reduction of the same magnitude”, that is, cuts of 0.5 percentage points. “Confirming the expected scenario [de desinflação e ancoragem das expectativas em torno da meta de inflação], the members of the Committee, unanimously, foresee a reduction of the same magnitude in the next meetings and evaluate that this is the appropriate rhythm to maintain the contractionary monetary policy necessary for the disinflationary process”, informed the BC. , this Thursday, who met only once, personally, with President Lula, who has already stated that the high interest rate has a negative impact on the country’s growth and job creation. “We had a single personal conversation. It was very good, just before the turn of the year (…) I am always open to discussions, not only with the president, but with any member of the government. I had meetings with some ministers. I meet more with [o ministro da Fazenda] Haddad, but I am open to talking to Lula at any time”, he added. In an environment of political polarization, Campos Neto assessed that it is natural for the President of the Republic to have opinions on the interest rate, and that this “is part of the process”. “We try to show that the decisions were technical. The BC started to raise interest rates a year and a half before the elections, raised them all the time, stopped very close to the elections. By understanding that that was a movement that if we made it stronger and earlier, we would be able to quell inflation faster”, he said. He also denied that he has political pretensions after leaving the Central Bank. end of next year. “I have no pretensions to be a partisan politician (…) It has been a great pleasure to work at BC, but I have no ambition beyond that”, he declared. Campos Neto stated that he will probably return to the private sector in 2025 .

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