Credit measures do not contaminate debate on monetary policy, says Ceron – 04/20/2023 – Market

The Secretary of the Treasury, Rogério Ceron, said this Thursday (20) that credit measures presented by the government will not affect the current debate on monetary policy in Brazil.

In total, the government presented 13 measures to stimulate the credit sector and PPPs (public-private partnerships) this Thursday. According to a document released by the Ministry of Finance, the guidelines seek to reduce operating costs, default and interest rates on final consumer credit.

“They are not immediate, they are structural measures, so they do not contaminate this discussion on monetary policy”, said Ceron during a press conference to present the proposal. “They aim to guarantee a consistent and sustainable resumption of investments in the country in the medium and long term.”

The basic Selic interest rate is currently at 13.75% per annum, a high level that has been the target of constant criticism from the government. President Luiz Inácio Lula da Silva has said several times that this level undermines the supply of credit and the growth of economic activity.

According to Ceron, with the measures presented by the government, within two to four years the country will have a “much more developed” market, both in the PPP and concessions sector and in the insurance and credit markets.

Regarding PPPs, Ceron also said that the Inter-American Development Bank has already formalized a line of credit for this type of investment in states and municipalities.

“The IDB has already formalized the provision of a line for these operations to states and municipalities, including technical support and follow-up during the entire execution of the contract”, said Ceron during the press conference.

“Other institutions, Banco do Brasil and BNDES, also [estão] in an advanced design stage for the availability of lines; Private banks are also at an advanced stage,” added the secretary.

Ceron also said that the National Treasury has a “well-established mechanism for triggering counter-guarantees” in cases of default by creditor entities.