Lula again criticizes Central Bank autonomy and says he will reassess the measure

President Lula (PT) stated that he intends to reassess the Central Bank’s autonomy after the end of Campos Neto’s mandate at the head of the institution. In an interview with TV network On Monday night (2), Lula criticized the current interest rate of 13.75%, stating that he “will charge” the Central Bank for the Selic level.

“I want to know what the independence (from the Central Bank) was for. I will wait for this citizen (Campos Neto) to finish his mandate so that we can make an assessment of what the independent Central Bank meant”, said Lula.

Asked whether there could be a proposal to change the BC’s operating model during his government, the president said yes. “What happens is that we talked. Is this country working? Is this country growing? Are people getting better? No. So I want to know what independence was for,” he said.

In the interview, Lula also stated that “there is no reason for the interest rate to reach 13.75%”. “What is on the agenda is the interest rate issue. inflation of 3.7%. When you make a target like that, you are exaggerating a promise that you have to tighten up to fulfill. I’m saying that Brazil didn’t need that. Well, this country with 4% inflation, with the economy growing, this country goes away, grows. (…) So, does he (Campos Neto) want to reach European standard inflation? No. We have to reach standard Brazilian inflation”, said Lula.

“We are going to ask the president of the Chamber and the Senate if they are happy with the performance of the president of the Central Bank. I think they imagined that, by making the Central Bank autonomous, the economy would grow again, interest rates would drop and everything would be wonderful”, declared Lula.

“An inflation of 4.5% in Brazil, 4%, is a good size if the economy grows. Now, you make a goal that is illusory, you don’t meet it, and because of that, you are harming the country’s growth”, criticized the president.

The autonomy of the Central Bank was approved by Congress and sanctioned by former President Jair Bolsonaro (PL) in February 2021. The justification is to guarantee the formal independence of the BC and monetary stability.

According to the law, the mandates of the president and directors of the Central Bank last four years and do not coincide with the mandates of the President of the Republic. The objective is to avoid political interference in the institution. The current BC president, Roberto Campos Neto, was appointed by Bolsonaro and will remain in office until December 2024.