Speaking to journalists, Haddad said he had discussed names with Governor Roberto Campos Neto to replace the central bank's current monetary policy director, Bruno Serra. But he stressed the appointment is up to Lula and must be approved by the Senate. The news comes after Lula repeatedly criticized the central bank's policy stance, saying the interest rate was too high, and said the body's formal autonomy could be reviewed after the end of Campos Neto's term, in December 2024.
Brazil's central bank last week decided to maintain its Selic benchmark interest rate at 13.75%, and said it was considering holding interest rates at a six-year high for longer than markets expected due to fiscal risks.
Regarding the policymakers' statement, Haddad said the central bank could have been more "generous" with the fiscal adjustment measures already signaled by the newly inaugurated government. "I think the (Copom) statement could be a little more generous with the measures we have already taken. So I understand that we are going, as I have said several times, to harmonize the fiscal policy with monetary policy. One helps the other," he said.
"A fiscal policy helps monetary policy. But we can't forget that monetary policy helps fiscal policy," he added. Haddad said the current government has inherited a "delicate" fiscal situation, which in his opinion is at the root of the fiscal situation mentioned by the central bank. Brazil's Finance Ministry presented in January plans to more than halve the government's estimated budget deficit this year by boosting revenue and trimming expenditures. However, many economists have questioned whether the government can pull that off, focusing expectations instead on new long-term fiscal rules promised by April to replace a constitutional spending cap that has been adjusted repeatedly. (Reporting by Victor Borges and Marcela Ayres; Writing by Carolina Pulice;)
