Haddad says he already imagined a fall in the dollar and demands ‘harmonization’ of BC – 04/14/2023 – Market

Hailed by Aloizio Mercadante, president of the BNDES, as responsible for the drop in the dollar to less than R$5, the Minister of Finance, Fernando Haddad, stated that he already saw the Brazilian currency below its real value.

“I always imagined that the real was very devalued, that there was no reason, especially after fixing an interest rate at the current level, something that has been going on for almost a year”, he said, during a press conference with the Brazilian delegation, in Beijing. .

Haddad also said he believed that change would come “if we took the measures we are taking”, later adding: “Brazil is a much stronger economy than it sees itself. The Brazilian economy responds very quickly to adequate stimuli”.

The minister defended “harmony” between the Executive, Legislative and Judiciary powers, for the real to “return to a more adequate level” in a stable manner. And the same goes for the Central Bank chaired by Roberto Campos Neto, who was not mentioned by name.

“I have been insisting on harmonizing fiscal and monetary policy,” said Haddad. “It doesn’t do anything for me to do a job and the Central Bank not to follow the movement, towards converging on a sustainable policy of growth with low inflation, income distribution, environmental sustainability, which is what everyone wants.”

Asked about the adoption of specific currencies for trade, which was included in the joint statement by Lula and Chinese leader Xi Jinping, the minister underlined that “it is an idea that has been on the negotiating table for a long time between the Brics, within the scope of Mercosur , and President Lula reestablished that agenda”.

To this end, he would now have asked the Treasury, together with the Chinese Ministry of Finance, “to look into the topic and deepen the possibilities of an exchange in local currency”, which it will begin to do.

The joint statement, which came out on Friday night, included the signing of a memorandum between the Brazilian and Chinese ministries agreeing to “deepen dialogue in the economic-financial area and strengthen trade in local currencies”.

Asked about the reaction he expects from the United States, with Brazil getting closer to China, Haddad replied that he expects “more partnership with the United States”, arguing that Brazil has to overcome the “previous stage of isolation of the country”.

“Brazil is too big to keep choosing a partner,” he said. “It doesn’t make sense for you to approach one to distance yourself from another. All that the economic area wants, with the president’s sponsorship, is to return to the table. Lula says every time, ‘Brazil has returned’. It has returned to the world , not one way or the other.”

Regarding China, Haddad said that the country is excited about the possibility of participating in bids for large infrastructure projects in Brazil. He stated that the possible installation of a Chinese electric car maker was discussed, in a possible mention of BYD’s negotiations with the State of Bahia.

“I think that this agenda opens up a new challenge for Brazil, which is to attract direct industrial investment from China in Brazil, through the creation of job opportunities and aiming at a type of reindustrialization compatible with […] with a sustainability agenda,” he said.