Lula: allies advise him to give the Central Bank a truce – 02/15/2023 – Market

Allies advised President Luiz Inácio Lula da Silva (PT) to take a break from criticizing the interest rate, the BC (Central Bank) and the head of the autarchy, Roberto Campos Neto. They argue that criticism, from now on, be restricted to certain members of the party and, especially, parliamentarians.

According to reports made to the Sheet, the president had been advised by his closest aides to avoid making direct criticisms of Campos Neto. Despite agreeing with the objection to the interest rate level, the view expressed to the Chief Executive is that he need not be responsible for this role – even because his attacks ended up giving greater importance to the president of the monetary authority.

The advice was followed at the end of last week, when Lula went to Washington to meet President Joe Biden and, even questioned by Brazilian journalists about interest rates, he did not comment. The agenda was restricted to the defense of democracy and trade ties with the United States.

Furthermore, in the three speeches he made this week, at the PT’s anniversary act, at the resumption of Minha Casa, Minha Vida and works in the Northeast, he did not mention the main target of his previous public speeches.

In all of them, he made a speech in which he mentioned the fight against hunger or the resumption of growth. During the handover of residences in Santo Amaro (BA), he said that “the country’s ferris wheel is starting to turn today”.

Another point in common in the speeches was the adjustment of the target for Jair Bolsonaro (PL), his political opponent. The representative said that the former president did not deliver the banner and said that he will remove Bolsonarists “hidden in droves” in the government.

“I’m going to fight for our party and we’re going to fight for the Brazilian people, so that a genocide never wins elections based on lies and the industry of lies,” said Lula, on Monday night (13), during the PT event .

Even before Campos Neto’s interview with Roda Viva, on TV Cultura, when the head of the autarchy made nods to the government, Lula had already stopped talking about the subject. At the PT’s anniversary event on Monday night (15), criticism was restricted to the party’s president, Gleisi Hoffmann.

“It’s time to face this market-driven discourse of the rich in this country, that we have a fiscal risk. What risk? Of not paying the debt? It’s a lie. Our debt is all in reais, in a reasonable proportion of GDP. We still have international reserves, left by the PT”, said Gleisi.

“They lie, and the Central Bank, an autarchy of the Brazilian State, corroborates the lie, imposing a high interest rate squeeze on Brazil. This has to change”, he added.

In parallel to this, government deputies launched, on Tuesday (14), a Parliamentary Front to Combat Abusive Interest Rates.

“It is because we understand that the issue of high interest rates is central to the Brazilian economy and to job creation that we are launching the Parliamentary Front Against Abusive Interest in the Chamber of Deputies to mobilize parliamentarians and society on the subject,” said the leader of the PT in the Chamber, Zeca Dirceu (PR).

To Roda Viva, on the other hand, the head of the monetary authority showed willingness with the government and said that he will do everything in his power to bring the BC closer to PT management. Despite this, he disagreed with a change in inflation targets.

“If we make a change now, without an environment of tranquility and an environment where we are reaching the goal easily, what will happen is that you will have an effect contrary to the desired one. Instead of gaining flexibility, you can end up losing flexibility”, stated Campos Neto.

The president of BC again waved to the government two days later, this Wednesday (15), during a formal session at the National Congress. He said that it is necessary to have a “more special eye on social”.

Lula had been intensifying his criticism of the BC since the institution maintained the basic rate (Selic) at 13.75% per year and indicated that it could sustain high interest rates for longer.

The initial focus of Lula’s attacks was the BC’s autonomy, which he called “nonsense”. The rhetoric later evolved into direct attacks on Campos Neto.

In the eyes of the chief executive, the president of the municipality went from being a “competent economist” on the eve of the elections to being “that citizen” at the end of the first month in office.