"What is on the agenda is the interest rate issue," he added, suggesting that the central bank should seek a "Brazilian standard" for inflation rather than a European one. The comments were in line with previous comments by Lula suggesting that the current inflation target hinders economic growth. Campos Neto has insisted that the central bank plans to act independently, adding that its formal autonomy gives it the capacity to stabilize markets. (Reporting by Maria Carolina Marcellos; Editing by Stephen Coates and Christopher Cushing)
(Adds context)
By Maria Carolina Marcello
BRASILIA, Feb 2 (Reuters) - Brazilian President Luiz
Inacio Lula da Silva on Thursday issued his latest threat to the
autonomy of the country's central bank a day after it floated
the possibility of keeping interest rates at a six-year high for
a longer-than-expected period.
Lula, who had previously described central bank independence
as "nonsense," said he could review its autonomy by the end of
the term of the current central bank governor, Roberto Campos
Neto.
Selected by right-wing former President Jair Bolsonaro,
Campos Neto had his mandate extended to the end of 2024 under a
new law established in 2021 granting the central bank formal
autonomy.
The central bank's policy statement issued late on
Wednesday specifically said it could keep its benchmark Selic
rate at its current 13.75% for longer than markets expected due
to fiscal risks under Lula.
"So I want to know what independence was for," Lula said
during an interview with local channel Rede Tv. "I'm going to
wait for this citizen to finish his mandate so that we can make
an assessment of what the independent central bank meant."
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.