Lula supporter investor defends BC policy – 03/24/2023 – Panel SA

One of the first businessmen to support the PT in the 1980s, Lawrence Pih came out in defense of the decision of the Monetary Policy Committee of the Central Bank, which kept the Selic at 13.75% per annum this week, despite pressure from President Luiz Inácio Lula da Silva for lowering interest rates.

“I supported Lula and I continue to support and I don’t want to see the same mistakes made in Dilma’s administration”, says Pih, who was also one of the first businessmen to publicly criticize Dilma Rousseff in 2016.

He criticizes the presidential pressure to lower interest rates and says the country is following a path similar to that of the Dilma years, with Alexandre Tombini as president of the Central Bank, when the Selic was pressured down to the level of 7.25%, but later had to rise to 14.25% while the rise in prices did not subside.

“The BC has become the last line of defense against a mistaken policy of growth via monetary easing. With the need to finance a federal public debt of BRL 6 trillion, a basic interest rate below expectations will cause the reallocation of assets, creating bubbles in all asset classes. Stimulates capital flight, devaluation of the real, further pressure on inflation. Interest at 13.75% after adjusting for inflation and Brazil risk, in addition to the tax burden on income, there is 2% net real interest left over for the investor. It is not very attractive, given the risks, and who will finance the public debt and the private sector?”, says Pih.

The investor, who once owned one of the largest wheat processors in the country, disputes the recent statements by Josué Gomes da Silva, president of Fiesp, and Flávio Rocha, owner of Riachuelo, who called the level of interest rates this week pornographic .

“Pornographic are those who look only at their companies and forget that millions of retirees depend on a small additional income, the result of decades of savings to complement the crumbs they receive from retirement. Pornographic is ignoring how much inflation harms the poor”, he says. Pih.

In addition to defending interest rates in the fight against inflation, Pih questions the delay in presenting the new fiscal anchor. “Where is the credible and sustainable framework? There is internal conflict within the government itself. There is no agreement between wings with different views. How is the BC without knowing how the fiscal framework will be? What is the BC’s mandate? Is it still an inflation target? Or has it changed without anyone knowing? This discussion is very important because we have heard only one side with fragile arguments. A debate between adults would be good”, he says.

Joana Cunha with Paulo Ricardo Martins It is Diego Felix

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