(Recasts with new comments from Haddad)
BRASILIA, May 5 (Reuters) - Brazilian Finance Minister
Fernando Haddad said on Friday that he favored taking a
long-term view of inflation and that the central bank could
begin cutting interest rates.
He added, however, that the government could not pre-empt
any decision on changing the inflation targets set by the
National Monetary Council consisting of himself, the planning
minister, and the central bank governor.
"I think continuous inflation targeting is much better than
looking at the calendar year," Haddad said in an interview with
CBN radio.
The National Monetary Council will set the annual inflation
target for the coming three years at its June meeting, while
also reaffirming its previously established targets.
President Luiz Inacio Lula da Silva has advocated for higher
targets and a less restrictive monetary policy. The central
bank, meanwhile, has suggested the discussion may have raised
inflation expectations, requiring interest rates to remain at
13.75%, the highest they have been in the current cycle.
Brazil's inflation rate slowed more than expected in the
year to mid-April, reaching its lowest point since late 2020.
Haddad reiterated criticism of the central bank, saying the
bank could already begin cutting rates. He said next year's
inflation projection was "very moderate."
Following media reports naming his executive secretary
Gabriel Galipolo as a potential nominee for the central bank's
board, the minister said the government would announce the picks
once a decision has been made.
However, he did acknowledge Galipolo could be a candidate
for various government positions.
Amid government efforts to prevent an escalation of the
public debt, Haddad said measures would be taken until the
accounts were balanced.
He said he had asked the Senate to vote on a measure
regarding the taxation of the transfer price of multinational
companies and said he expected proposed fiscal rules to be voted
on by the Lower House in May and a tax reform to be voted on in
June.
Haddad also said the government "has everything" to
establish a successful thesis in a high-profile tax case in the
Supreme Court, potentially increasing revenues by nearly 90
billion reais ($18 billion) annually.
The case has already been ruled on by a lower court.
($1 = 4.9842 reais)
(Reporting by Marcela Ayres; Editing by Toby Chopra and Hugh
Lawson)
