Lula signals that he is not in a rush to appoint a successor to the BC, but sends a message to Campos Neto

BRASILIA (Reuters) – President Luiz Inácio Lula da Silva said this Tuesday that he will still have to decide whether he will bring forward the appointment of Roberto Campos Neto’s successor as president of the Central Bank or whether he will make the announcement closer to the end of his term on December 31.

“I have to nominate more directors and I have to nominate the president of the Central Bank by the end of the year. I just have to decide whether to bring it forward or leave it to nominate as close as possible to the expiration of the mandate,” said Lula at breakfast with journalists, in Brasília.

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The president stated, however, that he will have no problems “living” with Campos Neto for the remainder of the head of the BC’s term, pointing to the fact that they have already been living together for a year and four months, since Lula returned to the Presidency.

The establishment of the operational autonomy of the BC in 2021, which determined a fixed four-year term for the president of the authority, created an unprecedented scenario in Lula’s third term, preventing the president from being able to immediately indicate a name of his choice to command the authority monetary.

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Campos Neto was nominated by Lula’s predecessor, former president Jair Bolsonaro, his opponent in the 2022 elections and still his main rival in the country’s current political scenario.

Since the beginning of his term, Lula has frequently highlighted his differences with Campos Neto. He mainly criticizes the BC’s restrictive monetary policy, stating that the basic interest rate level remains very high.

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This Monday, Lula once again questioned Campos Neto’s actions and defended the reduction of interest rates, highlighting that few countries currently have the security that Brazil has and asking the head of the BC for “responsibility”.

“I hope Roberto Campos takes into account that Brazil is not at risk… There are very few countries safer than Brazil,” said the president.

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According to Lula, the only winners from high interest rates are the market and the losers are “the Brazilian people”. He said he was driven by the interests of the population, and not those of financial market participants.

“This country cannot be scared every day that the market didn’t like this or didn’t like that.”

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In the first year of Lula’s term, the BC kept the basic interest rate unchanged at 13.75% until its August meeting, when it made a first cut of 0.5 percentage points. Currently, Selic is at 10.75%.

One of the names being considered for succession as BC president is the director of Monetary Policy, Gabriel Galípolo. The former executive secretary of the Ministry of Finance argued earlier this month that the institution’s leaders should not be involved in the selection process, which is the responsibility of the President of the Republic.