Haddad and Tebet praise the milder tone of the Copom minutes

With a milder tone than last week’s statement, the minutes of the last meeting of the Monetary Policy Committee (Copom), released this Tuesday (27), was well received by the economic area of ​​the government. The ministers of Finance, Fernando Haddad, and of Planning, Simone Tebet, praised the fact that the directors of the Central Bank (BC) waved with the possibility of cutting interest rates in August.

During the launch ceremony of the Crop Plan, at the Planalto Palace, Tebet stated that the document is in a more “realistic” tone than the communiqué issued shortly after the Copom decision, last Wednesday (21). Traditionally, the minutes are released six days after the end of each Central Bank collegiate meeting.

“(The minutes) came showing that there are signs of a drop in interest rates as of August. And also guaranteeing what we are already sure we are doing. If you look at the divergence of some votes in the minutes, it shows that they already recognize the work of the economic team. We are not just planting seeds, we are planting credibility, legal certainty, predictability for Brazil. And the minutes have been acknowledging this. Now the only thing missing is August for them to start lowering interest rates,” said Tebet.

Before going to the Planalto Palace to launch the Safra Plan, Haddad also commented on the Copom minutes. For the Minister of Finance, the document indicates that a large part of the BC’s board recognizes the efforts of the economic team and that there is a consensus that the Selic Rate (basic interest rate for the economy), at 13.75% per year since August of the year past, peaked and will begin to decline in the second half.

“The fact that there is a clear signal from a good part of the board (of the Central Bank) that the effects of high interest rates produced the results (contain inflation) and the fiscal risk (risk of lack of control of public accounts) is far from is the most important thing”, declared the minister.

Harmonization

Haddad once again defended the harmonization between monetary (interest rate setting) and fiscal (public spending control) policies and said that the tone of the Copom minutes opens space for this to happen soon, with the drop in basic interest rates. “Brazil is on a sustainable fiscal trajectory and, therefore, the harmonization of fiscal policy with monetary policy, which is something I have been advocating since December, I believe may happen soon”, declared Haddad.

Last week, Haddad said that the Central Bank was “hiring a problem” by not indicating when it will start cutting interest rates, despite the fact that the inflation has registered a sharp deceleration in recent months. The Minister of Planning criticized the difference in tone between the statement issued shortly after the Copom meeting and the minutes published on Tuesday.

“Again, the minutes came almost contrary to what is said in the communiqué. This is data that the Central Bank needs to review, it creates an unnecessary stress situation in the communiqué and then comes with a more realistic minutes. It is nothing but constructive criticism. May this be reviewed by the Central Bank”, said Tebet.

Graduality

The minutes revealed that the majority of Copom members, formed by the BC president and the directors of the body, believe that the drop in inflation and the impact on market expectations opens space for the monetary authority to start cutting the Selic rate in August, even if gradually.

“The predominant assessment was that the continuation of the ongoing disinflationary process, with consequent impact on expectations, may allow the accumulation of the necessary confidence to start a parsimonious process of inflection in the next meeting”, informed the Central Bank. on the 1st and 2nd of August.

Last week, the statement issued shortly after the meeting had also softened the tone compared to the previous ones. The phrase about the possibility of the Central Bank raising interest rates again in case of high inflation or economic turmoil was removed, but the text did not indicate when the Copom would start cutting interest rates, which attracted criticism from ministers of the economic area and even part of the financial market.