Selic: Economic team sees BC boycott – 06/21/2023 – Market

The economic team reacted badly to the Copom (Monetary Policy Committee) decision to maintain the interest rate at 13.75% and interpreted the statement as a “boycott” of the government of Luiz Inácio Lula da Silva (PT), which has the cut in Selic to stimulate economic activity.

There was an expectation that the Central Bank would adopt a softer message in the document, opening the door to a possible easing of monetary policy as early as August – which was frustrated by the text released by the monetary authority.

According to reports heard by the Sheet, members of the government raised the tone against the Central Bank and its president, Roberto Campos Neto —the preferred target of criticism from the PT government. Now, there is already talk of a “declaration of war” by the autarchy.

Another wing of the government still hopes that the Copom minutes, to be released next Tuesday (27th) with more details on the decision, will bring a milder tone, opening space to signal a cut in the Selic rate.

Behind-the-scenes criticism echoes the tone adopted by Lula, who has been systematically criticizing Campos Neto for the level of interest rates in the country. The petista has already stated that Campos Neto has no commitment to Brazil, but to the government of Jair Bolsonaro (PL), who appointed the current head of the monetary authority.

In addition to pressure from Lula and his ministers, a group of 51 members of the Conselhão (Council for Sustainable Economic and Social Development of the Presidency of the Republic), among them businesswoman Luiza Heleno Trajano, wrote an open letter asking for a cut in interest rates. There was also a protest in front of the BC building in São Paulo, on Tuesday (20), promoted by trade union centrals.

After this Wednesday’s decision, the president of the PT, deputy Gleisi Hoffmann (PR), defended the departure of the current members of the BC.

“It is time for the Senate to act, with the powers that the law confers, to charge Campos Neto and the Bolsonarist directors of the Central Bank. They sabotage the economy and act purposely against the country. There is no way to tolerate this situation anymore. departure of these people,” said Gleisi on a social network.

The leader of the government in the Senate, Jaques Wagner (PT-BA), told the Sheet who disagrees with BC’s decision and complained that “there wasn’t even a hint” for an interest rate cut. “I haven’t talked to anyone [do governo] about it, but must not have liked it. By the way, not the government, I think Brazil didn’t like it,” he said.

“But it is their role, they are carrying out their mission. I just want the right to disagree. Me and Brazil,” he added.

Earlier, during the session, Wagner told the senators in plenary that “there is no intention of the government to remove the president of the Central Bank”.

“The President of the Republic of our government respects the legislation in force. The legislation of autonomy already exists, it doesn’t matter if I agree or not, the law is there and will be respected”, he said.

“On the other hand, I want to say that it is not the government, it is not the President of the Republic, it is several sectors of the economy that have the right to [de criticar]. Who sits in the chair of president of the Central Bank is not superior to any of us”, said Wagner.