Lula again criticizes the Central Bank over the basic interest rate

President Luiz Inácio Lula da Silva (PT) once again criticized the Central Bank for maintaining the basic interest rate (Selic) at 13.75% per year, during the tenure of economist and former minister Aloizio Mercadante as president of the National Bank for Economic and Social Development (BNDES), this Monday morning (6). The statement is just one of many criticisms that he has been making to the monetary authority in this third government.

According to him, the Central Bank has not yet begun to reduce the basic interest rate due to lack of pressure from society and businessmen, and not because of the Brazilian economic scenario. For Lula, the productive sector needs to “learn to demand, complain about high interest rates”, and that the independence of the institution has not proved to be effective.

“When the Central Bank depended on me, everyone complained. The only day that Fiesp [Federação das Indústrias do Estado de São Paulo] talked about was when interest rates increased. Now don’t speak. In my time, 10% was a lot, and today thirteen and a half (sic) is little”, said the president of the entity, Josué Gomes, who was present at the ceremony.

Lula completed by saying that “if the business class does not manifest itself, if people think that you [empresários] they’re happy with thirteen and a half percent (sic), honestly, they’re not going to lower interest rates. There is no justification for the interest rate to be currently at thirteen and a half percent (sic). just see the letter [ata] of Copom [Comitê
de Política Monetária do Banco Central] for us to know that this increase in interest rates and the explanation they gave to Brazilian society is a shame ”, he added.

The basic interest rate has been at 13.75% since August last year, whereas a year ago it was 10.75% according to the Central Bank (see here). At the last Copom meeting, last week, the committee signaled that the beginning of a fall in the Selic could take longer than expected by the financial market, at the beginning of the second half.