Payroll interest reduction was done wrong, says Lula – 03/21/2023 – Market

President Luiz Inácio Lula da Silva (PT) said this Tuesday (21) that he was in favor of reducing the interest rate ceiling on payroll loans from the INSS (National Social Security Institute), but said that it was done wrongly. , without discussing with the government’s economic team and political core and with the banks.

The measure was announced by Minister Carlos Lupi (Welfare) and caused a great deal of noise from the government, as it was not the subject of ample discussion. In a recent ministerial meeting, Lula criticized ministers who announce “genius” without consulting the Planalto Palace.

It was a message not only for Lupi but also for Márcio França (Department of Ports and Airports), Luiz Marinho (Labour) and also for Flávio Dino (Justice and Public Security).

Lula gave a live interview to the Brasil 247 portal this Tuesday morning (21). The president was asked about the work of his team, which would have recently hit his head, which led to his complaint at the ministerial meeting

The president said he was satisfied with his ministers, and then commented on the announcements made without his approval, highlighting Carlos Lupi’s speech on the reduction of payroll. Despite the criticism, he said the “thesis is a good one”.

“Lupi was with me and Rui Costa (Casa Civil). He said that it was difficult for retirees to pay their debts because they increased the indebtedness of retirees by 45%. a debt that he pays 45% of what he earns on debt. So it was necessary to lower the interest, but it was necessary to lower a little, because there is a law after we left the government that regulates the interest limit that can be, I don’t know if it’s 1.8 or 1.9”, said the president.

Lula then stated that the reduction would be a “right thing”, not only of Banco do Brasil’s interest but also to try to discuss it with the financial system, with the institutions that carry out payroll loan operations. He called “theft of the poor pensioner” the fact that banks carry out this loan at a rate of 8% per month.

“It was necessary to have reached an agreement to announce a measure involving Finance, Planning, public banks and private banks. No, Lupi announced [a redução]”, said the president, adding that he had asked to settle the details with Minister Rui Costa, before moving forward with the measure.

“He announced, something that could be 100% good, favorable, created a climate of dissatisfaction in the banks, which needed to be prepared, because it cannot go down with the ease that they want them to go down”, he added.

Such as Sheet showed, the Lula government will hold a new meeting until next Friday (24th) in search of an agreement for the impasse generated by the reduction of the INSS payroll interest rate ceiling, from 2.14% to 1.70% per year. month. The meeting will be attended by representatives of the financial system and banks.

At this Monday’s meeting, according to people familiar with the conversations, a range for the ceiling between 1.9% and 2% was cited as feasible – before the cut, the banks defended that the ceiling should fall from 2.14% to 2.08 %.

If an agreement is reached at the meeting that will take place until Friday, the board could review the decision next week, possibly on Tuesday (28).