Central Bank President Roberto Campos Neto said Thursday (18) that he does not intend to remain in office after his term ends in 2024.
In the rule providing for the independence of the BC, approved by Congress in 2021, the president and the board of directors of the BC can be reappointed in office, once, for an equal period.
Central Bank President Roberto Campos Neto. – Photo: Alan Santos/PR
“I was against the reappointment, I tried to withdraw from the project. I think reassignment is unhealthy, because it creates a weakness in the mid-term: the president of British Columbia is interested in re-appointment in the mid-term. The answer is no [aceitaria ficar]. “If it were up to me alone, I would not be reappointed under the Home Rule Act,” Campos Neto said during a lecture organized by BTG Bank.
Under the rules, there is a four-year term for the BC Chairman and other directors. This term does not coincide with the presidential term. The President of the Central Bank assumes the duties of his office on the first day of the third year of the term of the President of the Executive Authority.
The central bank raises the interest rate again to 13.75%
In the lecture, the British Columbia president stated that inflation “appears to have peaked in several places [do mundo]in some with a slow deceleration.”
“We’re starting to see a small movement of global inflation cooling, but at very high levels. And in some places, cores are approaching a maximum,” he added.
He noted that the inflation dynamics in Brazil improved this year with the adoption of measures by the government and the National Congress to reduce fuel and electricity prices. However, he noted, these same measures also shifted some inflationary pressures to 2023.
According to BC Chairman, the decision to give more “focus” to 2024 inflation while setting the base interest rate, Selic, is based on an uncertain environment due to changes in taxes on fuel and electricity.
By focusing more on early 2024 as the “appropriate horizon” for rate setting, he says, the cost in terms of activity level (due to higher interest rates) tends to be lower.
The market realized that BC may be less aggressive in setting an interest rate with this decision. Currently, Selic’s rate, at 13.75% annually, is already at a six-year high.
To set the interest rate, the central bank uses the inflation targeting system. When inflation is high, BC raises Selic rate. When inflation estimates align with goals, the central bank lowers the interest rate.
BC’s decision on interest rates is always made looking into the future, over a period of six to 18 months. Higher interest rates, in turn, tend to slow the Brazilian economy, affecting job creation and income.
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Campos Neto reiterated that the public spending policy will be an immediate challenge to the President of the Republic, who wins the elections this year.
“Anyone sitting in the chair will have a huge immediate challenge to consider social stability and debt stability. There is concern about the measures [de elevação de gastos, como o aumento do Auxílio Brasil de R$ 400 para R$ 600]How will it be funded?
According to him, there is uncertainty in the financial market about whether the country will be able to balance debt with social measures.
“Tax [política para as contas públicas] Always crucial, Brazil is always talking about public finances. Brazil is always in danger, there is always a problem with finances. It is a “backlash”. And he concluded that we have to set it straight, it would be difficult to do this management of looking at social balance and debt at the same time.”
In the minutes of the last Monetary Policy Committee (Copom) meeting, BC expressed concern about increased spending promoted by “PEC Kamizaze” – which circumvented the law and boosted social benefits.
The institution assessed, at the time, that extending these policies “could raise risk premiums in the country” (leading to higher interest rates for the population) and put pressure on inflation as the public accounts trajectory worsens.
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