February 20, 2024

Monica de Paul central bank delay in cutting interest rates subject

Analysts expect the interest rate to start falling to 13.5% annually in August.

In an interview with Natusa Neri, economist Monica de Paul assesses why the Central Bank of Brazil is “delayed” in the process of cutting interest rates, given the domestic situation, and says that an attitude of “extreme caution” could harm the country. economy country.

“We know that Brazilian households are in debt, that Brazilian companies are in debt and that this interest rate is bad for businesses and families,” he says.

The President of the Central Bank, Campos Neto, and Finance Minister Fernando Haddad, during a session on the topic of interest rates, inflation and growth, in the Federal Senate, in Brasilia (DF), this Thursday (27). – Photo: FATIMA MEIRA / FUTURA PRESS / FUTURA PRESS / ESTADÃO CONTEÚDO

Monica still adds that the rate cut should not happen this week. And she stressed the need for prior communication, via Cobom’s minutes, and the “muddy scenario” that central banks around the world face in light of the resistance to inflation in developed countries.

“The central bank is part of the government,” he notes. “I think that sometimes gets forgotten in Brazil.” “In an effort to maintain its independence, the central bank just decided to take a somewhat extreme stance, putting its foot on this negative rate of 13.75%, and making sure that it would only change the rate when it suited it, so as not to give the impression that it was cutting the interest rate because there Pressure from other parts of the government. In Brazil, this was of great importance, and ultimately a great misfortune for us.”

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