Brazil's benchmark interest rate is currently at a six-year high of 13.75%, which Haddad said was causing a "credit problem" although he did not give further details.
The fuel tax resumption signals a commitment to the
sustainability of public accounts, thereby assisting
policymakers to cut rates, Haddad said, stressing that
ultimately the decision still rests with the central bank.
Leftist President Luiz Inacio Lula da Silva has also
repeatedly and publicly criticized the level of interest rates
given slowing inflation, saying the current inflation targets
are too low and detrimental to economic growth.
But Haddad said that changing the targets was not the answer.
"We will recover the public budget from the perspective of
revenue and expenditure to quickly create space for reducing
interest rates," he said. "The inflation target will not be what
causes the interest rate to fall."
Haddad also said the country's new fiscal framework could be
presented before the central bank's next policy decision on
March 22.
The new fiscal rules are eagerly awaited after Lula secured
Congress approval for a multi-billion spending package that
bypasses the constitutional cap to meet campaign promises.
(Reporting by Marcela Ayres; Editing by Steven Grattan, Kirsten
Donovan)
