For him, this government limitation on investments ends up requiring greater participation from the private sector. He recognizes, however, that the private sector needs to be comfortable investing.
The BC president also commented on the country’s fiscal situation, with high debt and limited collection capacity, which requires more efficiency in spending. “Minister Haddad has made enormous efforts on the fiscal side. It is difficult to cut spending, because the discretionary is very small. We need to think about reform, about not having indexation mechanisms”, he stated.
Fees
Campos Neto also said that the important thing when reducing short interest rates is to have mechanisms for longer terms. “It is important to have a movement of falling interest rates in the short term and that is reflected in the long curve, which depends on the credibility of what you are doing. Interest, in the end, is more of a consequence than a cause. That is why it is It is important to have a fiscal and monetary anchor”, he highlighted.
He commented that Brazil’s tendency towards interest rates in the longer term is to stabilize inflation at a low level. He also pointed out, to an audience of businesspeople, that the BC only decides the interest rate of the day, which matters less to most businesspeople. The mechanism for long interest depends on the type of risk you are willing to take to lend money to the government.
He had been asked about interest rates above double digits during the lecture.
