The President of the Central Bank said he did not communicate, in advance, with Bolsonaro’s Finance Minister about changes in monetary policy, and will not do so in this government either.
The President of the Central Bank, Roberto Campos Neto, stated that he “never” called Paulo Guedes, former Minister of Economy under Jair Bolsonaro’s administration, to inform him in advance about changes in the guidance of monetary policy from the monetary authority.
This statement came after a division within the Copom (Monetary Policy Committee) to define the basic interest rate, the Selic. The President of the Central Bank said he will not act differently with the current Finance Minister, Fernando Haddad, and also will not inform him about changes in monetary policy.
“It is a prerogative of the Central Bank, which has autonomy. I never did that in the previous government and I certainly do not plan to do so in this one,” said Campos Neto in an interview with the newspaper O Estado de S. Paulo.
The guidance in March projected a reduction of 0.50 percentage points in the Selic. However, the guidance was not followed. On May 8, the Central Bank decided to reduce the Selic by 0.25 percentage points.The basic interest rate dropped from 10.75% to 10.50% per year.
The members of the Copom made the decision with 5 votes in favor of the smaller reduction and 4 votes for the level that had been followed, of 0.50 percentage points.
The President of the Central Bank, Roberto Campos Neto, had the deciding vote (tie-breaker).Everyone who voted for the half percentage point cut was appointed by President Luiz Inácio Lula da Silva (PT) to the Central Bank.
According to Campos Neto, the committee discussed the impacts that the division of votes would have on the financial market, but ultimately concluded that each member should have their individual vote on the interest rate cut – which resulted in the division.Read other topics covered in the interview:
