Haddad says the country is ready to start a cycle of interest rate cuts

This Friday (19), the Minister of Finance, Fernando Haddad, defended again the reduction of the basic interest rate of the Brazilian economy, the Selic rate. Speaking at an international event promoted by the Central Bank (BC), in the capital of São Paulo, the minister said that the country is ready to start a cycle of falling interest rates and criticized the BC’s decision to keep the Selic at a high level.

“We think there is room to start a cycle (of falling interest rates) but, finally, there is a technical team there (in the BC’s Monetary Policy Committee) that is formed, and that we try to respect”, he said.

“Whenever I hear a monetary authority say that when you are fighting an infection, you have to take the entire antibiotic pack, I always remember that there is also the observation that you cannot take two antibiotic packs. You have to take the right measure so that the economy can, at the same time, readjust itself”, he said.

According to Haddad, the Ministry of Finance has already submitted data to the BC that show that the country’s economy would support a reduction in interest rates. “Due to the behavior of future interest rates, the exchange rate, and inflation itself, and this at a time when the economy is showing that it is not sluggish, as was thought at the beginning of the year, it is slackening because rates are very high”.

The minister highlighted that the country’s economy must be managed with the well-being of people in mind and the promotion of development with social justice. “We are public servants, we have to serve our people and promote development with social justice and, obviously, in the case of a Central Bank event, with low inflation rates”.

Haddad noted, however, that the debate on interest rate policy cannot be an “affront” to the Central Bank and that the ministry and the BC must work in harmony. “We have to understand that discussing monetary policy is not an affront to the monetary authority. Quite the contrary, everyone in this room and watching us knows that we are working towards the same goal”.

According to Haddad, the ministry and the BC must behave like two arms of the same organism, “remembering that there is not one hand more important than the other, and there is not one that is reactive to the other, both hands have to work actively in advantage of adequate regulation”.

The minister also said that Brazil is in a position to “take the lead” in the next expansion cycle of the world economy and that the country has an obligation to pursue growth rates above the world average, given its potential in natural, human and national technology.

“Brazil has been experiencing a condition in which inflation rates are reduced, growth projections are revised upwards, international conditions, both in terms of trade and reserves, due to the Central Bank’s actions, have even shown a very high resilience. big, and we understand that Brazil has everything to, in a very adverse, very adverse environment, take the lead in the next expansion cycle”, he defended.