Dollarization could end up accentuating poverty

Dollarization could end up accentuating poverty
August 26, 2023 – 21:28

The head of the Brazilian body since 2018, when Jair Bolsonaro was president, referred to the dollarization proposal in Argentina.

The process of dollarization of the Argentine economy is one of the campaign pillars of javier milei in his presidential run. After modifying his statements about the amount of dollars needed to carry out the process and the time required, he remains steadfast despite warnings from the international community: from the Nobel Prize in Economics Paul Kurgmann to the prestigious consultancy Oxford Economics. Now the voice of Roberto Campos Netocurrent owner of Central Bank of Brazil.

Roberto Campos Neto He finished his economic studies at the University of California Los Angeles (UCLA), where he finished one of his master’s degrees. He worked at two private banks in Brazil: Bozano Simonsen Bench and Santander Bank. In the latter he developed most of his professional career, becoming Head of Treasury and gaining confidence from paulo guedesMinister of Economy of Jair Bolsonaro. Precisely this president is the one who appointed him at the head of the Central Bank of Brazilin November 2018.

Interviewed by the Brazilian magazine Veja, Roberto Campos Netowho was sustained in his position after the assumption of Lula da Silva in the country, maintained that “miley understands that he central bank did more harm than good to Argentina because issued money and devalued the currency, when in reality the institution only instrumentalized a government policy”.

“To promote dollarization, the weight should be cheap enough enough for the US currency to enter the country quickly. However, if the devaluation is too strong, could end up accentuating poverty“, he added.

Between the tensions that he maintains Roberto Campos Neto with the current presidential administration of Brazilthe official maintained that “the president was democratically elected and has the right to criticize. I think that time will tell how serious, autonomous and technical the work of the central bank“.

the permanence of Roberto Campos Neto in his position is closely related to a law passed by the brazilian congress in 2021, which formalized the independence of the central bank. However, in the last week his bond with Lula da Silva became tense when the country’s main financial organization decided to lower -after almost a year- the interest rate from 13.75% to 13.25%, relying on the decrease in the inflation.

“There is a part of the inflation which is still well above target. Services inflation is falling, but it’s still not where we want it to be,” he said. Roberto Campos Neto and added: “That still requires the rates are in restricted territory. How restrictive will depend on the path we take and the variables that fluctuate along the way.”

Source: Ambito

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