Lula mocks Fiesp about relationship with BC and criticizes the interest rate

President Lula (PT) once again criticized interest rates in Brazil and defined the current rate as being “an excrescence”, shortly after mocking Fiesp (Federation of Industries of the State of São Paulo) for reacting to his criticisms regarding the current policy of interest practiced by the Central Bank, in an event held by the federation itself.

What happened:

Lula joked that, in his first terms, when he appointed the president of the Central Bank, Fiesp “always made the headlines in the newspaper criticizing the country’s interest rate policy”, but now he criticizes him when he is the one who criticizes the same figure, not nominated by him.

I’m not going to talk about interest rate policy here. I’m not going to talk because when I was president of the Republic and I appointed my president of the Central Bank, Fiesp lived, in every Copom meeting, Fiesp became the headline in the newspaper criticizing the interest rate policy. All. So, look, now I didn’t appoint the president of the Central Bank, I made criticisms. But in this country, where the financial market took over from industry, a president of the Republic cannot even criticize the president of the Central Bank that he is influencing the economy. And I want to say, here within Fiesp: it is an excrescence, these days, the interest rate is 13.75%. It is an excrescence for this country. The country doesn’t deserve this.”
Lula, in a speech at Fiesp

The vice-president, Geraldo Alckmin, also criticized the interest rate. “The exchange rate is good, competitive. Interest rates have to fall”, he said. Alckmin compared inflation and interest rates in Brazil today with data from 2020. “In 2020, (inflation) was higher than this and the Selic rate was 2%. How can you explain, with a even lower inflation, you have a Selic rate of 13.75%. It is obvious that this harms economic activity. It holds back economic activity”, said the Minister of Development, Industry and Commerce.

The president of Fiesp, Josué Gomes, also listed the interest rate as the main obstacle for the sector currently. “Interest rates will have to fall quickly, even so as not to embarrass Copom members. This level is totally unjustifiable,” he said in a speech.

nod to agribusiness

During his speech at Fiesp, Lula also mentioned agribusiness and highlighted the sector’s importance for Brazil’s economy. “We want our agribusiness to continue growing. It is important to bear in mind that Brazil also needs to be an exporter of grains, of meat, and this does not hinder the industry”, stated Lula, remembering that the more the sector is productive, more will buy machines and have access to technology.

The president also mentioned the measures announced today by the government to reduce taxes on the automotive sector, with the aim of lowering the prices of popular cars. “We know that 60% of the cars sold last year were sold in cash because there is no credit policy to finance them. The lower class is not buying cars,” declared Lula.

Still in the field of economics, Lula mentioned the role of the BNDES (National Bank for Economic and Social Development) during the 2008 crisis. “While the developed world generated 100 million unemployed people, we generated 22 million formal jobs.”

The petista also said that “the bank has to put money in the market for the economy to turn”. And he asked: “How will small businessmen survive if they don’t have credit? How will they be able to get to the BNDES and pay 18% interest? What to do?”