Discussing monetary policy is not confronting BC, says Haddad – 05/19/2023 – Market

Finance Minister Fernando Haddad said that debating the direction of monetary policy does not mean an affront to BC (Central Bank) decisions on interest rates.

“We have to understand that discussing monetary policy is not affronting the monetary authority. Quite the contrary,” said Haddad during an event promoted by the Central Bank this Friday (19).

In a direct message to BC president Roberto Campos Neto, present in the audience, the minister stated that he usually hears from the monetary authority that, when fighting an infection, it is necessary to take the entire antibiotic pack, in reference to the need to keep interest rates high. to bring down inflation.

“I also always remember the observation that you cannot take two packs of antibiotics. You have to take the right measure so that the economy can readjust itself from the macroeconomic point of view and guarantee the conditions for sustainable growth. I say that from the fiscal, social point of view and environmental,” said Haddad.

The minister also said that, when technically discussing the appropriate time to start the interest rate cut cycle, this does not mean putting pressure to force a drop in interest rates.

He reiterated that there is already room for the BC to cut the Selic rate. “There’s room to start a cycle [de corte dos juros]but it has a technical team that is formed and that we try to respect.”

He also said that “when you hear a second opinion from a doctor, you are not disputing the first opinion, you are forming a more solid judgment about what diagnosis and what treatment to prescribe.”

The minister added that monetary policy and fiscal policy are two arms of the same organism that need to work in harmony, and that both the Ministry of Finance and the BC work for the same objective, to promote economic growth with a low inflation rate. .

“I can say, without fear of being invasive, that the Treasury and the BC are trying to maintain the most cordial personal relationship possible day after day in order to create this new institutional space in which the population has confidence that the authorities will do their best to deliver their best results for society.”

The minister also stated that Brazil has an obligation to pursue growth rates above the world average, given the potential in relation to natural, human and technological resources.