Interest is an obstacle to the social function of the BNDES, says Mercadante

The president of the National Bank for Economic and Social Development (BNDES), Aloízio Mercadante, said this Tuesday (20th), in Rio de Janeiro, that the level of the Selic – the current interest rate in Brazil – at 13.75% it is an obstacle to the institution’s social function and to credit in general, which results in the retraction of credit to companies and an increase in defaults by individuals and companies. He criticized the current level of interest rates and pointed out the changes in the economic scenario that would allow for a reduction in interest rates.

“The macroeconomic environment has improved a lot. Here I congratulate (Minister of Finance, Fernando) Haddad, (Minister of Planning, Simone) Tebet and the government. This new framework of fiscal responsibility helped the interest rate in the long-term futures market to yield, the exchange rate reached R$4.70 yesterday (19), inflation collapsed and wholesale prices slowed down, but we have a rate interest rates growing in real terms. While inflation is falling, the interest rate remains at 13.75%. The country that has one of the lowest inflation has the highest interest rate,” he said at the opening of the series of panels Our Past, Present and Futurein celebration of the 71st anniversary of the BNDES.

New challenges

Mercadante even used irony to forward a request for a reduction in the Selic level. “I will not press today. I’m going to do what I did at Fiesp (Federation of Industries of the State of São Paulo). Let’s give a round of applause to the president of the Central Bank in anticipation of what will come this week at the Copom (Monetary Policy Committee). Even though he doesn’t have high expectations, let’s give him a round of applause. Who knows, maybe we can raise awareness?”, he said.

In the view of the BNDES president, this bank must always think about Brazil and adapt to new challenges, scenarios and missions. He added that the democratically elected government has a very difficult mission ahead of it, after facing a difficult electoral process, when “the data on the use of the public machine reached a level without any precedent in the history of democracy.”

Aloízio Mercadante recalled that he was elected federal deputy in 1990, the year in which former president Jair Bolsonaro also arrived at the Chamber. Since then, according to him, he has seen the formation of a coherent and systematic defense of the coup, dictatorship and censorship in the country, ending with the last electoral campaign, in which even the closing of the Federal Supreme Court was defended, in addition to the position of Army tanks in front of the Planalto Palace to demand that the election be held by printed ballot and even the meeting of the former president with ambassadors from several countries, to, as he reported, “try to delegitimize the electoral process”.

The highlight at this moment, according to him, was to reinforce the idea that the reconstruction of democracy in Brazil is a difficult task.

“Rebuilding Brazilian democracy, preserving the democratic rule of law, recovering the prestige of the Federal Supreme Court as an institution and the Executive as the manager of the country is not something. It is not a simple task to face this parliamentarization of the Brazilian budget, which removes from the Executive a capacity for coordinated and structuring actions and a change in governance standards”, he argued.

bank role

For him, in this reconstruction process it is necessary to discuss the role of a public bank in Brazil, following examples of investments to companies offered by similar institutions in countries like the United States, which released US$ 20 billion for a microprocessor company and Germany , where financing for green hydrogen has zero interest rates.

Mercadante emphasized that Brazil has the cleanest energy matrix of the countries that make up the G20 (a group formed by finance ministers and heads of central banks of the 19 largest economies in the world, plus the European Union), with a large expertise in ethanol to lead the process of transformation and sustainable energy. “We need to open the horizons of debate in this country. We need to reflect with a little more pragmatism and down to earth what we are facing and what competition we have”, he signaled.

climate crisis

For Mercadante, one of the BNDES’ challenges is to guarantee investments in combating the effects of the climate crisis. He warned that, with the expected arrival of El Niño (a natural phenomenon characterized by abnormal warming of the waters of the Pacific Ocean), the drought will worsen in Brazil and there may be an impact on the harvest with new climatic extremes in the southern region.

“We have a gigantic way to go for Brazil to contribute to tackling the climate crisis. We are the country with the greatest diversity on the planet, with the largest strategic forest reserve that is the Amazon rainforest, in addition to other biomes. This agenda is here to stay at the BNDES and will remain”, he concluded.