Brazil President Luiz Inacio Lula da Silva Criticizes Central Bank Autonomy

Posted on 02/06/2023

Brazil President Luiz Inacio Lula da Silva, who returned to power defeating Jair Bolsonaro, criticized the country’s central bank. The president accused Banco Central do Brasil of ruining the economy while failing to control inflation. In its first policy meeting of 2023, the Central Bank of Brazil’s Monetary Policy Committee kept the country’s benchmark interest rate stable at 13.75%, where it has been since August 2022. Lula wants to boost social programs and loosen inflation targets.

Lula raised investor concerns in January 2023, when calling the central bank’s recently approved autonomy law “nonsense” and saying too tight inflation targets were “choking the economy.” Then in early February, the leftist president said in an interview to Rede TV/UOL that central bank chief Roberto Campos Neto “has to explain why keeping an interest rate of 13.75%, and why the possibility of additional hikes if we don’t have demand inflation.”

Brazil’s inflation ended 2022 with a sharp slowdown from double-digit highs seen throughout the year.

Keywords: Central Bank of Brazil.

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