He brazilian president, Luiz Inacio Lula da Silvahe came back to ask to the Central Bank of Brazil lower the interest rates. This happens after, last month, the monetary authority decided to enter into a relaxation cycle with a 50 basis point cut up to a still restrictive 13.25%.
Lula added in a speech that does not speak with the governor of the Central Bank, Roberto Campos Neto. The official was appointed by former President Jair Bolsonaro to direct said entity and its mandate ends next year.
What happened in the last month with interest rates in Brazil?
for the first time in three yearshe Central Bank of Brazil cut its interest rate of reference in 50 basis points. Brazilians are considered the highest real interest rates in the world in relation to the inflation.
Last month, the entity decided to take its interest rate of reference to 13.25%after keeping the cost of credit stable for almost a year to combat the inflation. Despite signaling future reductions, authorities emphasized their goal of keep rates in tight territory.
The decision of the monetary agency was given between the criticisms made by President Luiz Inácio Lula Da Silva to the owner of the entity, the Bolsonaro Roberto Campos Netowhom accused of defending foreign interests to the country’s economy for maintaining high interest rates despite the slowdown in inflation.
GDP of Brazil: balance sheets and expectations
Between April and June, the Gross Domestic Product (GDP) from Brazil grew up compared to the previous quarter much more than the median of 0.3% expected in a Reuters poll of economists. He 3.4% increase with respect to the same period of 2022 also exceeded the 2.7% rise projected by economists.
A slowdown was widely anticipated in the largest economy in Latin America after the revised growth of the 1.8% in the first quarterpowered by seasonal changes of a agricultural sector robust.
In that framework, the Treasury of Brazil pointed out this Friday a possible slowdown of economic growth inthe third trimester of the year, with expectations of one modest recovery in it last trimester.
In addition, after the change in the reference interest rate and, despite the fact that they continue to be high, the private economists surveyed by the central bank they have been checking the rise his GDP annual forecast.
Source: Ambito
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