Lula says he has to change BC autonomy if economy does not improve – 02/16/2023 – Market

President Luiz Inácio Lula da Silva (PT) said this Thursday (16th) that the autonomy of the Central Bank must be changed if the country’s economy does not improve. The petista is in a dispute with the president of the monetary authority, Roberto Campos Neto, due to the interest rate.

The Chief Executive defends a reduction in the country’s basic interest rate, the Selic, while Campos Neto prefers to keep it at 13.75%.

As the Central Bank autonomy law was sanctioned in 2021, the definition is in the hands of the financial institution. Lula, however, has already classified the legislation approved by Congress as “nonsense”.

In an interview with CNN this Thursday (16), the president said that if the Central Bank’s autonomy brings “an extraordinarily positive thing”, it can be maintained.

“What I want to know is the result. The result will be better. An autonomous Central Bank will be better, improve the economy, great, but if it doesn’t improve, we have to change,” he said.

Lula also harshly criticized the financial market, which, according to him, “is very fragile and needs to be a little more serious.”

“I if I made the speech that Joe Biden made last week in the National Congress [americano] he would be called a communist, a terrorist. This market is very conservative. You have to like making money, but you have to have a bit of social sensitivity,” he said.

Lula also stated that the dialogue between the president of the Central Bank and the government should be more concentrated with the Minister of Finance, Fernando Haddad.

“Well, if I can’t talk to him about the interest rate, if I can’t influence him to reduce the interest rate, if I can’t talk to him about employment, then what am I going to talk about? It’s important that he talk to Haddad all over day, every hour, every month, every year and that it only meets the inflation target. And therefore, be aware that the inflation target cannot be the reason why you are obliged to increase the interest rate”, he said.

The Chief Executive also said that it is not his role to enter into dispute with Campos Neto. “It is not up to the President of the Republic to fight with the president of the Central Bank. I would even have the right because he is not president of the Central Bank appointed by me, he was appointed by Bolsonaro, he was appointed by Paulo Guedes. So, it means that the political head his mind is very different from mine and from those who voted for me. But he is there, he has a law, he has a mandate,” he said.